Can We Talk?

As I mentioned last week, collaboration is at the core of what makes VCIA so important to the broader captive insurance industry.  Understanding that, we’ve scheduled several semi-structured, interactive Discussion Groups  during the upcoming VCIA Conference  open to all attendees to allow the captive community a chance to converse with one another around topics of interest.

One group, whose focus is Getting Comfortable with Change, asks questions like ‘how do we accept and learn to even embrace change, and how do we assist our colleagues and clients in embracing change?  What opportunities and risks are developing because of recent events in our world?’ They will also explore how  companies are utilizing  captive programs to mitigate risks and enhance corporate wellness programs.

US Regulatory Realm is a Discussion Group that will give insight into what the NAIC is working on and its impacts on captives.   Lead by Vermont’s Director of Captive Insurance, Sandy Bigglestone, and Zaw Win, a director in DRM’s Business Law and Captive Insurance groups (and chair of VCIA’s Legislative Committee), this is an opportunity to look at the industry from a state regulatory view, allowing the group to discuss and consider a more uniform approach to working through key items as a collective unit.

One group of experts will provide some background on a proposed federal backstop for business interruption and event cancellation claims that occur because of a pandemic or public health emergency. The Pandemic Risk Insurance Act (PRIA), mirrors many of the fundamental mechanics of the Terrorism Risk Insurance Act (TRIA) which was established in the wake of September 11, 2001, to help provide adequate terrorism coverage in the United States. Will PRIA be good for captives? Are there other options? Will it pass? Come  join in the discussion to find out.

The certainties of life: death, taxes, and collateral. That is what Ed Koral of BDO, and Jeff Packard of PMA will serve up through a lively exchange of war stories, cautionary tales, and common-sense tips on how to navigate your organization through difficulties with reinsurance or self-insurance collateral requirements. Collateral Without Damage highlights steps you can take to ensure that you are better prepared for contentious negotiations and equipped with more leverage.

Everyone in our industry knows we need to attract and foster the next generation of professionals who will take captive insurance to new heights. Finding a Mentor is perfect for those new to the industry and looking to make their mark, as well as those who are long-standing members of the industry, looking to share knowledge, help someone along, and find a renewed purpose. 

Totally Cellular, Dude! You guessed it, the growth of new cell and sponsored captive formations across all domiciles will cover a brief background on cell/sponsored captives and explore recent developments, innovative uses, reporting and general evolution.

Talk amongst yourselves! The VCIA Annual Conference will be held online August 10 – 12th, which is fast approaching. Take a moment now to check out all the details here and Register Today! Thank you and I look forward to seeing you soon!

Rich Smith
VCIA President

Come Collaborate!

Alex Petrovich will facilitate the Captive Owners Only Forum at the VCIA Annual Conference in August.

One important aspect of the VCIA Annual Conference is the time that captive professionals connect and collaborate together outside of the educational sessions.  This is especially true for captive owners. It is such a niche career, and yet so important for those in it to have broad understanding.

Captive managers and other outside team members are invaluable  in advising and helping owners  address challenges and support growth, but the opportunity to discuss issues and ideas candidly with captive owner peers is hard to come by and can be immeasurably helpful. During the VCIA Annual Conference (less than 3 weeks away!) we’ve designed an  ‘off-the-record’ session (no press is allowed, and the session is for owners only), for captive owners to seize the opportunity to ask colleagues how they’ve addressed issues, and lend wisdom, stories of success, and knowledge to other captive owners.  

The forum will be curated by Alex Petrovich, an executive tasked with operating Circle Star Insurance Company, a Risk Retention Group and a segregated cell facility, STCICI. Alex spent almost a decade on the insurance company side, most notably at a Berkshire Hathaway subsidiary in the areas of underwriting, business development, finance, and operations.  He went on to work at Gallagher, leading cross functional teams and consulting with large companies on alternative risk management solutions, including captives.  Prior to his current role, Alex was a partner at Lockton Companies, the world’s largest privately owned insurance brokerage.

Collaborative interaction is the core of what makes VCIA so important to the broader captive  industry.  Not only does it shore up your captive knowledge and expand your captive horizons, but it strengthens the association through shared experience.  It’s the perfect example of a symbiotic relationship: your participation is the key to the continued success of VCIA as it strengthens our mission – which  allows VCIA to create these spaces to strengthen your captive IQ.  Quite a win-win!

The VCIA Annual Conference will be held online August 10 – 12th, which is fast approaching, so check out all the details here and Register Now!

Thank you and I look forward to seeing you soon.

Rich Smith, VCIA President  

Three…Two…One…Ignition

Last week I spoke about the increased interest of parametric insurance in the captive space as evidenced by the number of Ignite Talks coming up at our virtual conference focused on this emerging specialty. However, that is only one of the many topic areas being covered with Ignite Talks by the captive industry at VCIA’s 2021 Annual Conference coming up in three weeks.

We informally polled some of our captive owners to ask them what some of the challenges are that their captives have recently faced. We then asked our members to respond to those challenges (or those they have focused on) and present them in our Solution Labs at the conference. Ignite Talks are short, “TED-Talk” style presentations on these solutions.

Some of the challenge areas besides parametric insurance that will be covered include cyber regulation, captive strategic planning, third party risk, tax strategies, employee benefits, premium payment options, use of InsurTech, cell structures, legacy solutions, mentorship, managing volatility, risk distribution, predictive modelling for workers comp, finance and investment strategies, actuarial impact of the pandemic and situational awareness. Quite an incredible line-up!

The VCIA Annual Conference will be held online August 10 – 12th, which is just 3 weeks away so check it out here and Register Now!

Thank you and I look forward to seeing you soon. 

Rich Smith
VCIA President

It’s Hot!

Captivated – July 9, 2021

The record-breaking heat in western North America is just another example of the climate change challenge we all face in the years to come. The insurance industry, not surprisingly, will play a lead role in helping their clients –  and society overall – manage this risk in innovative ways.

One such innovation that is beginning to take off in the captive insurance arena is the use of parametric insurance. Parametric insurance is a non-traditional insurance product that offers pre-specified payouts based upon a trigger event. Trigger events depend on the nature of the parametric policy, which can include weather-related events as well as earthquakes, travel cancellations, and much more.

I know parametric solutions are getting more traction in the captive space because we have not one, but four organizations that are providing Ignite Talks at VCIA’s 2021 Annual Conference on the topic. Ignite Talks are short, TED-Talk style presentations on solutions to challenges facing captive insurers.

Not in any order, we have Aon presenting Parametric Insurance – An Alternative Solution, which will explain how captives supporting Parametric Insurance placements are helping organizations address a hardening market for Natural Catastrophe coverage, contingent and non-damage business interruption risks and other ‘difficult to insure’ areas.

Another session by AXA XL is entitled Parametric Solutions for Captive Owners where you can learn more about how parametric programs enhance risk management for captive owners, and the practical solutions offered through effective captive utilization.

X350 – Magnify Your Reinsurance Capacity to the World´s Largest Capital Market(s) With One Page presented by RYSKEX will explain how the future of buying reinsurance capacity as part of a blockchain-based Digital Risk Exchange (DREx) ecosystem will allow you to start selling your risks to the capital market with parametric risk trading.

And finally, Arbol presents Streamlined “Captive+Parametric” Solutions for Climate Change Risk Management which will explore how captives can play an active role in corporations’ responses to the climate change risk management mandate using climate data, online tools to structure and price parametric protections, and settle claims automatically via smart contracts.

Quite an incredible line up! The VCIA Annual Conference will be held online August 10 – 12th, which is fast approaching, so check it out here and Register Now!

Thank you and I look forward to seeing you soon.  

Rich Smith
VCIA President

The British Are Coming… And It’s Cool

We in the captive insurance realm have fond relations with our British friends in the industry – I mean let’s face it, you can’t go to a captive event anywhere without bumping into an ex-pat.

But this past week, it was nice to meet Peter Abbott, Her Majesty’s Consul General at the British Consulate General Boston and members of his team to talk things captive insurance. The meeting was facilitated through Brittany Nevins, Director of Captive insurance for Vermont’s Department of Economic Development and included Christine Brown, Deputy Director of Captive Insurance for Vermont’s Department of Financial Regulation.

Consul Abbott was making several virtual visits throughout the New England states to meet with leaders from key industries in each of the states – and naturally, captive insurance interested them the most out of all of Vermont’s industries.

We gave them the fascinating history of captive insurance in Vermont as well as discussed possible trade cooperation between the UK market and Vermont captives. And although there is already much collaboration between the U.S. captive industry and the London insurance world, it is always good to strengthen these ties.

Don’t forget registration is now open for VCIA’s Annual Conference this August. Click here for more information!

Thank you and I look forward to hearing from you.  

Rich Smith
VCIA President

Trust

Vermont’s Governor, Phil Scott, declared that all remaining COVID-19 restrictions in the state are lifted following a massive 80 percent vaccination rate among its eligible constituents.  Vermont is the first state to reach this important milestone and it has a lot to do with the competence of the Governor, his team, and the many folks involved with getting Vermont through this crisis.

As I mentioned in an earlier post, Commissioner Mike Pieciak and his team at the Department of Financial Regulations were heavily involved with this critical mission.  The Governor relied on Mike and his team to assist with the modelling of the COVID numbers and analysis using actuarial science. The work and reports generated by Mike’s team were used to inform the Governor, Health Commissioner, and all Vermont citizens.

The success also has to do with Vermont and its citizens. We are a small state and there is a genuine feel for community that permeates the state regardless of which town you live in or what your economic status may be. This “we are all in together” with the trust of government leaders and workers – who are our neighbors – made reaching the 80% goal achievable. It was not easy, and there are still miles to go (to quote another famous northern new Englander), but having trust in one’s neighbors, one’s community, and one’s government is key. Its that same trust Vermont captive insurance owners feel when they domicile in the Green Mountain State.

And although VCIA will be holding our annual conference virtually this year – registration is now open –  I feel confident that we will see each other again by early fall if not sooner.

Thank you and I REALLY look forward to seeing you soon.  

Rich Smith
VCIA President

Remembrance

With Memorial Day coming up this weekend I wanted to give pause for time to do something I do not do as often as I should: remembrance.

Usually, I am busy planning a BBQ or a bike ride or a trip to Lake Champlain this weekend, as Vermont explodes with spring blossoms, sunshine, and greenery. Like many of us, I treat Memorial Day as time off with friends and family. However, I do believe remembering those who have left us, and honoring those who put their lives on the line for the benefit of our country, our communities, and each one of us individually is important.

My father was one of those from the Greatest Generation – a vet from World War II who never really spoke of his time in the service, and if asked just said serving was what one had to do. Luckily for him, he was one of those who joined the war effort just as the hostilities were subsiding and was shipped out to the South Pacific after most of the Japanese forces had been pushed out. I remember him saying he was fresh out of high school and there was a sense of commitment – of doing the right thing – that permeated Americans back then, no matter their place in socie ty.

I do believe we owe a debt of gratitude to those who have served or are currently serving in the  armed forces. Their sacrifices, courage and commitment must never be overlooked. This year we also owe our respect and gratitude to those  who have been on the front lines saving lives during  the pandemic this past year plus. They have given so much for all of us, many times putting their own safety and security on the line to help others. Perhaps if there could be a silver lining from the COVID pandemic, it would be a renewed sense of the concept of the greater good, service to others, and recognition of true selflessness when the chips are down.

So, please have a safe and happy Memorial Day weekend with all your loved ones but also take extra time to  remember and appreciate.  Thank you and I look forward to seeing you soon.  

Rich Smith
VCIA President

Captive Review Recognition

Captive Review hosted its annual Power 50 awards yesterday and I wanted to highlight some of the winners with strong connections to VCIA and Vermont.

First, they gave a shoutout to leaders in the captive owner category, two of VCIA’s board members were recognized: Andrew Baillie of AES and Tracy Hassett of EdHealth. Also recognized in this category were VCIA members Deyna Feng from Cummins and Julie Bordo of PCH Mutual Insurance Company (RRG).

New entrants to Captive Review’s Hall of Fame were former VCIA board member Steve McElhiney with Artex, former VCIA finance committee chair Michael Corbett with Pinnacle Financial Partners, and recent VCIA Industry Service awardee Mike Zuckerman of Temple University.  Also recognized were Captive Professionals to Watch including Alicia Miller of Crowe and Molly Hengtes of Gallagher Bassett.

Finally, congratulations to our colleagues who were named in the Power 50, including Greg Agnone of Midwest Employers Casualty (50), Mike Raybshteyn of EY (45), Rob Walling of Pinnacle Actuarial Services (39), John Prescott of Johnson Lambert (38), Nick Frost of Davies Captive Management (36), Paul Corver of R&Q (32), Renea Louie of Pro Group (31), Amy O’Brien of Gallagher Bassett (30), Phil Giles of MSL Captive Solutions (29), Mike Serricchio of Marsh Captive Solutions (25), Steve Bauman of AXA XL (24), Anj Fowler of Madison Scottsdale (23), Bob Gagliardi of AIG (21), Dan Kusaila of Crowe (19), Karin Landry of Spring Consulting (17), Mike Meehan of Milliman (13), Pete Kranz of Beecher Carlson (11), Anne Marie Towle of Hylant Global Captive Solutions (8), Sandy Bigglestone of Vermont’s Department of Financial Regulation (7), Nancy Gray of Aon (3), and Brady Young of SRS (1).

Congratulations to you all… and even to you Dan Towle of CICA (9)!

Thank you and I look forward to seeing you soon.  

Rich Smith
VCIA

Signed, Sealed and Delivered

Vermont Governor Phil Scott signed a bill this past Wednesday that makes some tweaks to Vermont’s captive statutes.

Every year, without fail, VCIA works with our members and Vermont’s Department of Financial Regulation (DFR) to bring a consensus bill to the Vermont legislature that makes rational, sensible changes that allows our industry to thrive in this State.

Sure, some years there are some sexy items in the annual captive legislation, like the creation of dormant captives (slow down my heart!).  However, the changes usually look at streamlining and clarifying the law to make it both easier to navigate the rules to the game and do the business of captives.  This year was one of those years.

When starting a captive, there is a certain practical order to things, i.e., the captive needs to be incorporated before a license can be granted or needs a tax ID number before bank accounts can be opened.  The new law will bring the statute in line with modern practices and procedures. 

The act also reorders language regarding protected cells to make it easier to follow. Similarly, captive statute references the traditional insurance statutes when it comes to mergers and redomestications. With enough difference in the captive insurance merger and redomestication language, the new act creates a separate section within the captive statute.

Finally, the changes in Vermont law will make it easier for captives to merge, provided there is unanimous consent of the parties (shareholders, members, or policyholders).

There are a couple of tweaks, but like I said, there was nothing earth shattering in the new act. Just another piece of legislation advancing Vermont’s captive insurance industry.

Thank you and I look forward to seeing you soon.  

Rich Smith
VCIA President

Len Crouse

Vermont and the captive insurance business lost a true captain of the industry this week. Len Crouse, former Deputy Commissioner of Captive Insurance for the State of Vermont passed away recently. Len was appointed Deputy Commissioner in 2003 and prior had served as the Director of Captive Insurance since 1990.

Len was responsible for Vermont’s administration and regulation of captive insurance companies and risk retention groups as the industry grew and prospered. Without his steady hand Vermont would not be the leader in the captive arena we are today.

Anyone who knew Len also knew his mischievousness side as well! Whether yelling “hi, buddy” or “how are you doing, sweetheart” as he made his way through a captive conference or event, he became known as someone who could be tough with you on a captive issue at a meeting earlier in the day and then have a drink with you later that evening as an old friend.

Len is the recipient of the 2008 VCIA Industry Service Award and made an Honorary Member in 2019. All of us at VCIA share our condolences with Len’s wife, Carol, his family, and all of his wide range of friends.

Thank you and I look forward to seeing you soon.  

Rich Smith
VCIA President