Vermont’s 40th anniversary year of the inception of its captive industry is drawing to a close. Since 1981, Vermont has worked hard to be the top U.S. domicile and continues to strive for excellence. Currently, VCIA is working with Dave Provost and Sandy Bigglestone and their team at DFR to build another captive bill to be introduced into Vermont’s General Assembly.
Over the past two years of COVID challenges, the Gold Standard has never been so apropos as Vermont lead the captive insurance industry in incredible growth and resiliency. I could not be prouder to be a part of this great work.
Brittany Nevins, in her role as Captive Insurance Economic Development Director, has put together a terrific short film highlighting relationships, accomplishments, future goals—and really what it means to be part of the Vermont captive family. I hope you will watch and encourage you to share.
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.
As we all have heard over the past year or more, the captive insurance market is booming. I can’t tell you how many of our members I have spoken with in the past few months who’ve mentioned how busy they are setting up new captives, or helping clients expand current captive programs. Dave Provost from Vermont’s Department of Financial Regulation reported that Vermont has already licensed over 20 new captives – a “normal” year for Vermont is about 24, and we are not even halfway through the year!
So, that said, this is the perfect time to open registration for the VCIA Annual Conference! The event will be held virtually August 10th – 12th and registration officially opens June 15th. There will be plenty of top level education for newbies to get a better handle on this new risk tool they have just established, and plenty on how best to optimize captive programs that have been around for a while.
Sessions include setting up new captives, reinsurance programs that are available and appropriate for captives, and a discussion of whether risk retention groups are a mature industry. In addition, this year’s VCIA conference will include education focused on captive taxation issues and captive investment portfolios. The conference will conclude with a session in which Dave Provost and his stellar team will discuss captive “hot topics” with the top risk manager for Starbucks. Educational sessions will continue to discuss up to the minute emerging and current risks, and how captive programs relate to those risks.
This August we will be offering more ways for small groups to connect in video chat rooms. The event will feature Ignite Talks, Solution Labs, Morning Coffee and great keynote speakers. CPE, VT CLE and CRE credits are available to those who participate in the virtual conference webcasts.
So keep an eye out for conference details and registration opening next week, and prepare yourself to gear up!
Interesting news about OxyContin maker Purdue Pharma seeking product liability insurance and general liability coverage by creating a captive insurer. Purdue asked for permission to set up the captive insurer in federal court on Monday as part of the firm’s filing for bankruptcy protection, as it has been challenging for them to find a commercial solution with a third-party insurer, not surprisingly. Purdue faces more than 2,600 lawsuits alleging that it helped fuel the U.S. opioid epidemic.
As VCIA Member (and recipient of VCIA’s 2019 Industry Service Award!), Chaz Lavelle of Bingham Greenebaum Doll LLP stated recently in a September 17 article in Business Insurance, “We’ve had situations in the past where an operating company has gone bankrupt but the captive insurer which it has previously set up was fully solvent, continued to operate and pay claims notwithstanding the bankruptcy and the disposition of the company.”
It reminded me of the Vermont captive for the bankrupt firm Enron back in the 90s. Even though the firm was mired in bankruptcy proceedings due to the fraudulent leadership at the top, under the supervision of Vermont’s Department of Financial Regulation its captive remained solvent and paid out every one of its claims under its policies in full. Having the captive kept the policy claims separate from the bankruptcy proceedings. Even debtors require various liability, casualty, property and other insurance programs in the ordinary course of their businesses.
Thank you all very much, and I look forward to hearing from you.
VCIA Members: Join us January 24th at the historic Statehouse in Montpelier, VT for Legislative Day!
According to a new report by the R Street Institute’s 2017 Insurance Regulation Report Card published recently, Vermont again has the best insurance regulatory environment.
Vermont has been named as having the best regulatory environment for the fourth straight year and the fifth time in six years and the report cites developments such as Gov. Phil Scott signing H. 85 to expand the state’s captive insurance regulatory regime to cover agency captives last May. Vermont earned the only A+ in this year’s report card! Congratulations to DFR Commissioner Mike Pieciak, Deputy Commissioner Dave Provost and their team.
What greater impetus is needed, then to join VCIA on January 24th for our annual Legislative Day in Montpelier, Vermont, the coolest state capital in the country? Legislative Day is a chance for our members to meet the State’s top political leaders and hear about the issues that are facing Vermont in the upcoming year. It’s also a great chance for the captive industry to say “thank you” for the over 30 years of support from politicians and policy leaders from all stripes: Democrats, Republicans, Progressives and Independents.
This special event, for VCIA Members only, includes the VCIA Quarterly Board Meeting, lunch with Vermont Lt. Governor David Zuckerman, Commerce Secretary Michael Schirling and special guest speaker Jeff Carr, Vermont’s State Economist.
There will be meetings with legislative leaders and presentations to House and Senate committees. And don’t miss the Q&A opportunity with Dave Provost and the DFR Team after lunch! The event concludes with a fabulous evening reception where legislators, elected and appointed officials and VCIA Members mingle and exchange information about Vermont’s captive insurance industry and make plans for its continued success in 2018.
I was reading an article on the globalization of risk just the other day, and it made me realize just how “glamorous” a risk manager is these days. Many new economic challenges are a result of the rise in societal issues around the world, and these instabilities will spill out and influence other risks, such as cyber-attacks motivated by the social unrest. This was highlighted by John Drzik, New York-based president of global risk and specialties at Marsh, earlier this year. With political and social unrest in many countries higher than seen in decades, captive owners need to look at how to be more resilient and mitigate risk where possible within their operations, he said. I couldn’t agree with him more.
Mr. Drzik recommends running scenarios to find changes that could be made to company resiliency plans. Vendors in your supply chain should be diversified, portfolio investments should be examined for risk in particular countries that could be affected by a food or water shortage or social unrest which could cause business disruption damaging a business or investments.
Captive uses are evolving in response to these new risks. This is why, as a captive risk manager, you need to be a little bit James Bond to deal with international threats, a little bit Sherlock Holmes to dig deep through data to provide “elementary” analysis of whether the risk can be something captives can cover, and a little bit Bono because, well everyone should have a little bit of Bono in them!
VCIA will be in the Great White North of Minneapolis tomorrow, November 2nd, for one of our famous Road Shows, so if you are in the hood, drop on by! Thank you all very much, and I look forward to hearing from you!
I hope you can all join me next Thursday for my version of the Colbert Report, when I’ll have a chance to tell VCIA Members what VCIA is doing legislatively in Vermont, DC and internationally to keep the captive industry strong and thriving. I’ll be joined by Deputy Commissioner Dave Provost and VCIA’S DC counsel, Jim McIntyre, to inform our members on what’s happening at the state, federal and international level with legislation and regulations potentially impacting captives.
We are calling it “Captive State of the Union” and it’s not too late to register to attend! The webinar will be held October 13, from 2-3 p.m. EST, and will address VCIA’s activities on your behalf, and the status of important current issues like:
The Captive Insurers Clarification Act of 2015 (the bill to clarify The Nonadmitted and Reinsurance Reform Act (NRRA))
The Department of the Treasury’s proposed rules to implement changes to the Terrorism Risk Insurance Program (TRIP or TRIA) required by the Terrorism Risk Insurance Program Reauthorization Act of 2015
R. 3794, The Nonprofit Property Protection Act which will allow nonprofit RRGs to provide property insurance to their members who are 501(c)(3) nonprofits with over $50 million in premium, in addition to the liability insurance they already provide
FHFA’s rule to exclude captive insurers from the Federal Home Loan Bank
Activities and updates from the NAIC
Vermont’s captive insurance bill, H-538, which was signed into law last spring
New leadership at the Department of Financial Regulation, as well as an update on State leadership races
Go to this link to register online, but remember, it is for VCIA Members only – membership has its privileges! We will take questions during the webinar and I will do my best to be as snarky as possible and keep to a very high level of “truthiness.” : )
Thank you all very much, and I look forward to hearing from you!
A couple of quick updates from the President’s corner…
We are in the process of surveying our members and talking to captive leaders here in Vermont about potential changes to Vermont’s captive statute. After gathering ideas and vetting them internally, we meet with the leadership team at DFR and begin an iterative process that will ultimately produce a “captive bill” for introduction to the Vermont legislature in January. Coming in with a coordinated bill between the regulators and the industry gives us the clout to move a bill quickly to passage. If you have any good ideas (hey, even crazy ideas) send them my way – you never know!
Just a quick note to let folks know I will be attending the SIIA (Self-Insurance Institute of America) conference in Austin starting this Sunday and then heading directly to the NRRA (National Risk Retention Association) in Chicago on Tuesday night. SIIA is a member-based association dedicated to protecting and promoting the business interests of companies involved in the self-insurance and alternative risk transfer (ART) industry, including captive insurance. It’s a great opportunity to meet and talk to others in the self-insurance world. And NRRA’s conference brings together the leaders in the RRG industry annually to discuss the opportunities and challenges in the world of Risk Retention Groups. Vermont has more RRGs licensed than any other captive domicile.
And finally, I want to give a shout out to Bob Gagliardi from AIG (and VCIA Board Member) for his promotion. Bob was recently promoted to AIG’s Global Director of Captive Management and US Fronting. Our expectation is that AIG will need to build a new skyscraper in downtown Burlington to fit the whole operation. Congrats, Bob!
Thank you all very much, and I look forward to hearing from you.
Thanks to all who joined us in beautiful Burlington, Vermont, a couple of weeks ago for VCIA’s annual conference. Without a doubt, it was a terrific 2 ½ days with great programs, networking and events. With over 1000 attendees from 41 states and 14 countries, our annual gathering in August has grown to be THE captive insurance forum! To quote from one of our attendees “All the important captive market players from North America and parts of Europe were in attendance.” And many thanks to our sponsors and exhibitors without whom we could not put on such an event, as well as to the hundreds of volunteers who make it happen.
Now after a little break, we are back in the saddle again looking out for the captive industry. Currently we are working with U.S. Treasury on changes to the TRIA data call for captives, fighting to pass the NRRA clarification bill, and generally looking out for the captive insurance industry. You got to be a tough hombre to keep the posse moving!
Thank you all very much, and I look forward to hearing from you.
Len Crouse, shown here during his time as Deputy Commissioner of Vermont Captive Insurance
It’s officially summer in Vermont and things are getting hot – and I’m not necessarily talking about the weather. As most of you know, VCIA is hosting the “World’s Best Captive Conference” this week in Burlington (and yes, I have trademarked that!) and I am sure you are all making plans to join us.
I wanted to take the opportunity to congratulate Vermont’s own Len Crouse for making Best’s Review list of Key Influencers! As most of you know, Len was head of Vermont’s captive division during the heady days of growth for the State’s captive industry. As the piece rightly points out, he helped set the “gold standard” for Vermont and the industry as a whole when it comes to captive regulation. Len joins luminaries such as Hank Greenberg, Brian Deperrault, and Ajit Jain of Berkshire Hathaway. Congratulations Len – well deserved! And don’t miss Len speaking at the VCIA conference on the panel Group Captives Take Center Stage.
Thank you all very much, and I look forward to hearing from you and seeing many of you this week!