School’s Back In!

 

jack-black-smith-2Just got back from a couple of conferences this week and it always gives me great perspective. First, I attended the Self Insurance Institute of America (SIIA) conference in Austin (cool city!) where the focus is primarily healthcare and workers comp. SIIA brings together all the self-insurance groups in these areas, but is seeing a growth in the captive arena as it pertains to stop-loss and workers comp.  VCIA’s Janice Valgoi, DFR’s Dave Provost, Primmer’s Jesse Crary and I did many hours of booth duty over the course of a couple days. We had a number of people come up to us and ask, “So what’s the State of Vermont doing here?”  After explaining Vermont’s role in the world of captives it became clear to them and they seemed eager to understand captive insurance as the next new marketplace, but it also became clear to me that it will be a lot easier for organizations that are already working in the captive space to add stop-loss or workers comp, than vice versa.

At the National Risk Retention Association (NRRA) conference in Chicago (another cool city!) later in the week, I participated on a panel that examined the Next Generation and diversity in the captive insurance industry. The cool thing was that there were a number of insurance students from some nearby colleges who were not shy about what they think the industry should do, including coming into the classrooms and doing a spiel on captives, as well as providing mentoring and internships.  I think one of the best lines about this came from our long-time friend, Michael Bemi. When addressing the issue about the perception that insurance is boring, he said in captives you aren’t selling insurance, you’re building insurance – has a nice ring to it, I would say!

Thank you all very much, and I look forward to hearing from you.

The Power of Risk Managers

blogcapitolEarlier this week, RIMS (the Risk & Insurance Management Society Inc.) held their annual “RIMS on the Hill” legislative summit in Washington DC. RIMS is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities of more than 11,000 risk management professionals.  At the RIMS 2016 Legislative Summit, members from across United States held 70 meetings with legislators and Congressional staff focused on three legislative initiatives: proposed legislation on cyber security, ADA protection and tax treatment for captives.

Thanks to the hard work of VCIA’s Washington counsel, Jim McIntyre, RIMS highlighted their support for the Captive Insurers Clarification Act, S. 1561, introduced by Vermont Sen. Patrick Leahy and South Carolina Sen. Lindsey Graham on the behalf of the captive insurance industry. As most of you know, the bill would officially omit captive insurers from the Nonadmitted and Reinsurance Reform Act. The act failed to explicitly exclude captives from the definition of “nonadmitted insurers,” which leaves insureds unclear on whether independent procurement taxes on the insurance purchased from their captive must be paid to their home state in addition to the captive domicile.

Having the preeminent risk managers organization make the captive bill one of their top three priorities is, well there is no other way of saying it, “HUGE”! Because they represent the risk managers from such a variety of important organizations, Congress listens. Let’s hope Capitol Hill will do more than pay heed; but act!

Thank you all very much, and I look forward to hearing from you.

Rich Smith,
VCIA President

Don’t call it Chi-Town

legacy.skyscrapercenterI just returned from the National Risk Retention Association (NRRA) national conference in Chicago this week. Just like “Frisco” is frowned upon by the denizens of San Francisco, natives of the Windy City look askance at folks who call their great city “Chi-Town”.  Lessoned learned.

Joe Deems and his crew had a good turnout for the conference. Vermont always has a good attendance for this conference, which is no surprise seeing that over a third of all active RRGs are domiciled in the Green Mountain State. Besides Dave Provost, Sandy Bigglestone and Dan Towle representing the State of Vermont, other Vermonters taking part included Nancy Gray from Aon, Kate Boucher from American Excess Insurance Exchange, Mitch Cantor from ICCIE, Len Crouse and Dustin Partlow from JLT Towner, Christina Kindstedt from Willis,  and John Prescott and Brad Klein from Johnson Lambert.  A panel of RRG owners and VCIA members Tim Padovese of OMIC and Siri Gadbois of EIIA, along with Nancy Gray, spoke to the importance of proactive leadership both within their organizations and outside to strengthen the RRG and captive community. And Lynn Crisci of HAI Group participated on a panel covering cyber security.

Skip Myers of Morris Manning & Martin (and another VCIA member!) provided a refreshing outlook on where the National Association of Insurance Commissioners (NAIC) focus is regarding RRGs. After many years of scrutiny that included the adoptions by states of model laws and regulations, and governance standards, it looks like the NAIC has run its course and has diverted its attention to other sectors of the broader captive insurance market (will it never end!).

Senator Ben Nelson, the CEO of the NAIC was the keynote speaker at the conference. While I applaud Senator Nelson’s willingness to address the industry, it was clear there is still misunderstanding at the NAIC regarding the role and importance of the RRG industry.  His basic take on RRGs is that they have a very limited scope that should not be broadened. Although he hinted that the market circumstances in the future may provide the impetus to expand the role of RRGs in the insurance market.  Hopefully the willingness to enter into a more open dialog can begin to break down misconceptions and bring better change to the RRG industry.

I will be back in Chi-Town (er, Chicago) this month for one of VCIA’s world-famous Road Shows on October 13th. Go to www.vcia.com for more information – hope you can join us. Thanks and keep in touch!

Rich Smith
VCIA President

Once more unto the breach, dear friends…

henry-v-withRichThat’s right, a little Bill Shakespeare for all you classicists. It’s a stirring oration from his play Henry V, where King Henry rallies the English troops to attack the French city of Harfleur back in the Middle Ages (I saw Kenneth Branagh give it in his movie version of the play many years ago). I mention it because the good Senators, Patrick Leahy from Vermont and Lindsey Graham from South Carolina, have reintroduced the bill (S. 1561) that will clarify the NRRA provision passed in the Dodd-Frank Act a few years ago.

The original NRRA provision created considerable confusion and inadvertently upended one of the organizing principles of the captive insurance industry – regulation and taxation by the captive’s domicile.  Although it still remains an uphill battle getting anything passed in Congress these days, VCIA and our friends at the South Carolina Captive Insurance Association (SCCIA) are recommitted to getting it done. We will be working with others from the Coalition for Captive Insurance Clarity (CCIC) who have supported our efforts throughout this process.

Of course, the next line of the speech by King Henry is a little grim: “Or close the wall up with our English dead”… hopefully we won’t have to go that far.

Thank you all very much, and I look forward to hearing from you.

Richard Smith
VCIA President

Farewell, Bill and Andrea!

Andrea-BillBartlettA couple of weeks ago I kind of poked fun at one of my favorite groups of people in the captive world: actuaries. Sure, they have a reputation of being numbers geeks; but I have found that they make up some of the best people in the captive insurance industry. And now the news that two of the nicest and most supportive actuaries in our industry have announced they are retiring. Bill and Andrea Bartlett, the owners and founders of Bartlett Actuarial Group based in South Carolina, are an amazing example of the cool small “mom and pop” firms that sprinkle throughout our industry. They remind me of the story of the quiet folks in a community who always are there, volunteering, supporting the people and events for the good of the community. Even now, Andrea is finishing a stint as President of the South Carolina Captive Insurance Association where she was incredibly helpful in getting Senator Lindsey Graham to co-sponsor (with Senator Pat Leahy of Vermont) the NRRA technical corrections bill.

Bill and Andrea were two of the first people I met when I joined VCIA and they could not have been more kind or supportive. They will be truly missed by the captive insurance community, and by me.  Thank you all very much and I look forward to hearing from you!

~Rich

Chicago – My Kind of Town!

chicagoI am just finishing up my trip to Chicago for the National Risk Retention Association annual meeting (the “good” NRRA), and it was great to see so many folks associated with VCIA there. Not a surprise at all that three out of the four panelist on a panel entitled “Best Practices for RRG Boards” were VCIA members: Siri Gadbois from EIIA, Michael Bemi from the National Catholic RRG, and Derick White from Strategic Risk Solutions (SRS).  Stephanie Mapes, newly minted El Presidente of the Burlington law firm of Paul Frank + Collins did double duty on a couple of panels including “RRGs 101” and one on governance standards.

Other VCIA members included Mark Nozette and David Ross from Attorneys’ Liability Assurance Society (ALAS), Hope Maxwell of Eastern Dentists Insurance Company, Joe Meli from Gen Re, Paul Weber from OMIC, and Clare Bello of Vertical Claims Management. I found out while I was there that Joe Meli will be retiring at the end of the year, so my congratulations goes out to him. Joe was the driving force to get Gen Re more deeply involved in the captive arena over the past few years and we are all so appreciative of his hard work. Congratulations also to Dan Labrie, President and CEO of the Housing Authority Insurance Group (HAI), who was elected Chairman of NRRA by the board on Thursday.

Jon Harkavy from Risk Services (and former VCIA board chair), is a driving force at NRRA and the ultimate defender of RRGs wherever they are challenged and threatened. And of course, Sandy Bigglestone, Director of Captive Insurance at Vermont’s Department of Financial Regulation, rounded out the conference on a regulators panel the last day. Just listening to her describe the different regulatory issues surrounding RRGs makes you understand why Vermont has more of them licensed (by far) than any other domicile.

All in all, a very nice conference! Now, if I can just get back to Vermont…

~Rich

Capitol Support!

Rich at Capital crop

Dan Towle from the State of Vermont and I had great meetings on Capitol Hill this week regarding a couple of issues that have dogged the captive insurance industry  for a long time and some that have just flared up. Oh, wait… you are confused by my opening line “great meetings on Capitol Hill” no doubt. Well, perhaps it helps when you meet with staff from Vermont’s Congressional delegation on captive issues. Erica Chabot and Maggie Gendron from Senator Patrick Leahy’s office and Patrick Satalin from Congressman Peter Welch’s office not only gave us their undivided attention, but understand the captive insurance industry and provided excellent advice for us on a number of issues going forward.

The issues we discussed ranged widely:  Next steps in moving the NRRA clarification bill (sponsored by Sen. Leahy and Graham in the Senate and Congressman Peter Welch in the House); a proposal that updates the Liability Risk Retention Act (LRRA);  and the recent proposal from the Federal Housing Finance Agency (FHFA) to revise its regulations governing Federal Home Loan Bank (FHLB) membership that would define the term “insurance company” to exclude from Bank membership captive insurers.  One of the benefits Vermont captives have is the deep understanding and support of our Congressional delegation (along with our State policy makers and regulators). Although “logjam” is the catchword used more often than not when describing the Hill, it is a real pleasure to work with those who know how to cut through it.

Thank you all very much and I always enjoy hearing from you! Oh, and please follow VCIA on our other social media platforms, too:

  1. On facebook at Vermont Captive Insurance Association
  2. On twitter @vciaconference
  3. On our linkedin group at Vermont Captive Insurance Association

Thanks!

~Rich