Washington Unbound

Board and Cong WelchJust returned from a productive trip to our nation’s capital this week (I know, sounds a little counter-intuitive these days). We started out at the Self Insurance Institute of America (SIIA) annual conference which brings together many professionals in the self-insurance business.  Self-Insurance (also referred to as self-funding) is an alternative risk transfer strategy used by tens of thousands of employers across the country to finance their group health plans and workers’ compensation programs, where expenses are paid as they are incurred as opposed to paying a fixed premium to a traditional insurance company. Since captive insurance is a form of self-insurance, it was good to see the growing interest from both the businesses that use self-insurance for their employees as well as the many service providers in the industry taking a look at the captive model.  Mike Ferguson and his team at SIIA put on a great conference and I am sure we will see more intersections between our groups going forward.

While in DC, a number of VCIA’s board members, our DC counsel, Jim McIntyre, and I met with senior staff from the FIO’s office to discuss the concerns raised over the Congressionally mandated collection of information regarding the use and uptake of TRIA. VCIA was part of a broad coalition of organizations that had urged Congress to pass the reauthorization of TRIA last year, as many of our members utilize it in their captives. Not surprisingly, the FIO staff members had little background in the captive arena; however, I believe we were able to take another step in educating policy makers on the subject. The staffers seemed genuinely thankful for our information and I am happy that we continue to keep the lines of communication open.

Later that day, we met senior staff of Senator Leahy’s office to discuss the captive clarification bill he co-sponsored with Senator Graham of South Carolina. Erica Chabot, Legislative Director, and Maggie Gendron, Legislative Assistant, have been doggedly pursuing a mechanism to get the bill that we believe will “fix” the NRRA issue moved forward. Here’s hoping for a break in the logjam sooner rather than later!

Finally, we sat down with Congressman Peter Welch and his Legislative Director, Patrick Satalin, to thank them for their continued support of Vermont’s captive insurance industry. As usual, Congressman Welch impressed us not only with his unremitting backing of our industry, but his knowledge of captives as a whole. I feel VCIA’s on-going communication and efforts on behalf of the industry continues to help nurture support in Washington from these important leaders.

So, overall, a great trip to DC.

Thanks and keep in touch!

Rich Smith
VCIA President

TRIA Reauthorization

US-Senate-Building-TRIA

I want to pass on a report regarding TRIA reauthorization from Jim McIntyre, our intrepid representative down in Washington who has been monitoring captive related issues for VCIA.

The Senate has approved S.2244 to extend TRIA for seven years by a bipartisan vote of 93 to 4. The bill increases the insurers’ co-pay from 15 to 20 percent and raises the threshold of losses for mandatory federal recoupment of payments to $37.5 billion.  Sen. Tester offered an amendment to S.2244 that establishes the National Association of Registered Agents and Brokers (NARAB), which simplifies the agent and broker licensing process to ensure they can serve clients no matter where they are domiciled. The Senate passed this amendment by a voice vote. The Senate-passed version of NARAB includes a two-year sunset provision which means Congress will have to reauthorize NARAB two years after the first license is issued, which could be about four years from enactment.

The House Financial Services Committee recently voted to report out a bill to extend the federal terrorism insurance program for another five years. HR. 4871 would extend TRIA for five years, increase the insurer co-pay to 20 percent, and create a new program bifurcation for nuclear, biological, chemical, or radiological (NBCR) type of attacks. The House legislation also increases the program’s trigger over a four year period from $100 million to $500 million for non-NBCR events.  Clearly for the captive community the Senate version is preferable. Congressman Hensarling, who chairs the House Finance Committee, is no fan of TRIA and felt compelled to put something out there so as not to lose his voice in the debate.  Although Jim and others close to the issue feel Congress will eventually pass some type of TRIA reauthorization before it expires on December 31, this sets up a potential end-of-the-year scenario where Congress will delay passage until the waning days of their term.  Keep the Zantac close at hand…

Have a great weekend and, as always, please let me know of any issues or news affecting our great industry, or any ideas you might have to better serve you. Thank you all very much and I look forward to hearing from you!

~Rich