The Closer

Don’t miss the VCIA Conference Aug 10 – 12! Panelists for the ‘Hot Topics with Dave Provost’ session, from L to R: Tracy Hassett, Steve Legg, Sandy Bigglestone, Ellen Charnley and Dave Provost

OK, enough with the procrastination! The VCIA Annual Conference starts August 10th, and because it is virtual, folks tend to wait until the last minute to sign up. I understand! But online registration for the event closes Monday at noon – so NOW is the perfect time!  

Besides all the great educations and networking opportunities, the one event during the conference that everyone waits for is Hot Topics with Dave Provost. For those few of you who don’t know Dave, he is the preeminent captive insurance regulator in the world (don’t take my word for – ask anyone) and his knowledge, experience, and sense of humor, provides just the right closing to our much-anticipated captive conference.

The distinguished group joining Dave (see photo above) are Sandy Bigglestone, Vermont’s Director of Captive Insurance (and Dave’s right hand woman).  In 2018, Sandy was a recipient of the Women to Watch Award for her leadership, expertise, and accomplishments in the captive insurance industry by Business Insurance. Ellen Charnley, President of Marsh’s Captive Solutions Practice, is recognized as a global leader in the captive industry. And, Steve Legg, who has been with Starbucks since 1997, serving as director, risk management since 2006. Aptly moderated by VCIA board member, Tracy Hassett, President and CEO of edHEALTH, a first of its kind consortium of colleges and universities with the mission of reducing health care costs while enhancing consumer knowledge of options, plan design, disease management and wellness programs.

This epic group will get you totally up to speed on current developments in captive regulation, key issues facing the industry, future initiatives, increased interest in captives as a response to challenging markets, and much more. You can even ask them questions and provide comments of your own. Don’t miss it!  

So, take this moment to register for VCIA 2021!  Join these experts  and other audience members and share your experience and insight to make the conference even better. YOU are what makes this event incredible!  Check it out here and Register Now!

I look forward to seeing you next week!

Rich Smith, VCIA President

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

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

Back in the Saddle…

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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.

Rich Smith
VCIA President

Come One, Come All!

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The VCIA Annual Conference is NOT just for VCIA Members and the folks here in Vermont. Last year we had nearly 1100 people in attendance, from 42 states and 8 countries, including several captive regulatory teams (and captives) from many of our favorite competing domiciles.

Around 28% of our attendees were captive owners, a fact that makes VCIA very proud. So if you want to hear from and network with the very best and brightest experts in the industry including captive colleagues from all around the world, you should sign up today for VCIA 2016! This event can’t be missed.

Come get educated, network, and enjoy the Vermont summer on the shore of Lake Champlain. Come one, come all! August 9 – 11, 2016!

 Thank you very much, and I always enjoy hearing from you.

Rich Smith,
VCIA President

What’s Up, Doc?

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Janice Valgoi and I are in DC this week for the 2016 PIAA Medical Liability Conference, where we are working the floor spreading the good word about captive insurance. The conference brings together hundreds of professionals who work in insurance and alternative risk transfer, all looking to gain new insights on the global and day-to-day issues facing medical liability.

Today, no industry is changing as quickly or fundamentally as healthcare. At the same time, escalating medical professional liability costs have become a critical issue for health care providers and those seeking to improve health care value and outcomes.  Healthcare continues to be one of Vermont’s most abundant sectors. Currently 96 hospital and doctors’ groups have Vermont Captives, making it the second largest sector for captives trailing manufacturing with 100.

Successful MPL captives can measure the success of hospitals and physician groups in improving the safety of care by the degree to which malpractice asserts for those organizations declined over time. After all, everything else being equal, if safety has improved, the chance of doing harm and being sued should drop.  Further, to the extent a captive is successful at helping its members carry out risk management programs, actuarial assumptions can be modified, and premiums should go down.  Also, since previous premiums were based on old actuarial assumptions, an effective captive should generate a surplus in earnings that can be returned to its members. Save money = save lives!

If you are at the PIAA conference, swing on by to say hello!

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

Richard Smith,
VCIA President

Opening Day!

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Sure, many of you get excited with the coming of spring and opening day of Major League Baseball (which, by the way, has its captive in Vermont and is a valued member of VCIA!), but WE get excited here in Burlington for two reasons:

  1. The snow is finally melted and
  2. VCIA just opened registration for the best captive conference in the world!

After much planning and work by all our wonderful volunteer conference task force members and the intrepid crew here at VCIA, we have “opened the gates” for the captive industry to come to Vermont this August 9th -11th for our 31st annual conference.

Here are some GREAT reasons to come to VCIA this summer:

1. It’s a great source for captive career development and networking; earn CPE / CLE / ICCIE credit

2. Sessions with focus areas for those new to captive insurance, those involved in accounting / finance, operations, and risk management

3.
More advanced sessions than ever before, and expanded educational content

4. Two great keynote speakers: Charles Davis, CEO of Stone Point, and David Pogue, founder of Yahoo! Tech

5. Engaging, fun session formats including a game show, a mock trial, a TED talk style session, panels moderated by trade journalists, interactive technology, and several sessions using case studies for illustration

6. Many captive owner panelists from some of the most prestigious organizations in the world. All the industry’s key players will be at the VCIA Conference

7. New option for a tour of Stowe for your spouse or guest

8. Risk management tour (for captive owners) of the Vermont Teddy Bear Company

9. Connect with other captive professionals and get advice from our conference ambassadors at the “Ambassador Lounge”

10. Relax, learn and have fun with industry peers!

 
If that’s not enough, think of all the clever puns you can make with our “Lights, Camera, Captives!” film-making theme! Registration is now open. Register now to reserve your space at this great event!!

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

Rich Smith
VCIA President

RIMS and the Commish…

Susan-Donegan

Susan Donegan, Vermont’s Commissioner of the Department of Financial Regulation,has announced that she will be stepping down in June. Susan has been a true friend of the captive industry.

I hope to see a number of you at the RIMS conference this week in San Diego. Janice and I are working the Vermont booth (#2355) with Dan Towle, Dave Provost, Sandy Bigglestone, and a number of other Vermont luminaries. Although RIMS is, as a certain Presidential candidate would say, YUUuuuuge, its remarkable how many folks come around to the Vermont booth either wanting to learn more about captives or connecting with the team on a number of issues.  If you have a Vermont domiciled captive make sure you come on over and sign the RIMS Poster in the booth!

Our own Jim McIntyre will be moderating the captive insurance panel at 4:00 on Monday at RIMS. His panel is entitled Data Security and Breach Notification Legislative Update: What You Need to Know which will examine the federal government’s work to pass data security and breach legislation for consumer protection about to go into place. Jim will examine the legal ramifications for insurance companies.  Another panel included Mike Elliott, Senior Director of Knowledge Resources at The Institutes; and former VCIA Board Chair, Steve McElhiney, President of EWI Re, Inc. for a session entitled Using a Captive as a Risk Management Tool: A Case Study. Of course they are at the same time!

Changing gears, many of you might have seen the news the other day that Vermont’s Commissioner of Financial Regulation, Susan Donegan, is stepping down at the end of June. Susan is the “uber regulator” in Vermont and has been a true friend of the captive industry throughout her tenure. She supports the industry with the Governor, at the State House, and at the NAIC. Susan told me she didn’t have any immediate plans, but just wanted to enjoy a Vermont summer without all that work stuff to worry about. The Commish will be missed and we all wish her well in whatever new adventure she pursues!

Thank you very much, and I always look forward to hearing from you!

Rich Smith
VCIA President

Captive Bill in Final Stages of Passing (No Foolin’)

mrteeVermont’s General Assembly is going through the final stages of passing this year’s captive bill, H-538. I say “this year’s” because every year VCIA uses its member legislative survey results as a foundation to meet with leadership at Vermont’s captive management companies and captive attorneys in order to draft proposals for changes to Vermont’s captive statutes. With those proposals in hand, we meet with Vermont’s captive regulators to hammer out what will become the initial captive bill to be presented to the legislature.

We do this every year because we know it’s important. Why? First, the captive industry is always evolving, so we need to make sure Vermont’s laws keep pace. Second, giving Vermont’s legislators a bill every year to review, change and pass allows them to be engaged with the captive industry – a touchstone that cements their ownership of and responsibility to this very important industry to the State.

H-538 will address a number of issues, including the following:

  • Allow sponsored captives and association captives to file reports on a fiscal year-end. Many sponsored captives are only open to affiliates, and association captives are limited to members of the association; in those cases it is appropriate to allow the captive’s year to match the owner/insured’s.
  • Allow sponsored and industrial insured captives to enter dormant status. When we permit the company to enter a dormant status, we waive the premium tax and the company stays in Vermont, ready to be reactivated when and if the need arises.  The same logic was applied when we passed the dormant status last year: keep the company here rather than have it dissolve.
  • Protected cells operate as segregated accounts within an insurance company operated by a sponsor. Our focus in the past has always been on fortifying the walls of the cells so that cell participants are assured that their money is protected from the liabilities of other cells.  The bill will now allow the free movement of cells to a different sponsored captive or the conversion of cells into either an incorporated cell or a separate captive.
  • The legislature passed RRG governance standards last session. With a year of operation under our belts, some minor adjustments will be made to clarify the rules for easier implementation.

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

Mergers & Acquisitions (& You)

mergers-and-acquisitions

A study by insurance investment management firm Conning & Co., reported in a recent article from Business Insurance, sees another big year of mergers and acquisitions in the world of insurance. How does this affect you, a member of our elite captive insurance industry?

According to the report, the volume of merger and acquisition activity in the insurance industry more than quadrupled in 2015, (from $43.8 billion to $194.9 billion in 2014), with additional major activity expected, particularly in the property/casualty sector.   Those are big numbers. Some of the increase was driven by several large transactions, including Ace Ltd. and Chubb Corp.’s deal, according to the report entitled: “Global Insurer Mergers & Acquisitions in 2015, The Big Bang”, but the report also stated there were some sectors facing strong external challenges, such as medical professional liability.

The healthcare transactions were motivated by a number of factors, including the Affordable Care Act. “Growth in government-subsidized programs, such as Medicaid and Medicare Advantage, accompanied by the retreat of traditional employer-based plans in favor of high-deductible plans and exchanges, generated pressure to acquire Medicaid and Medicare providers and build scale to generate efficiencies,” according to the report.  We have certainly seen the impact on healthcare captives in the same vein. Clearly, mergers and acquisitions will put continued pressure on the captive arena as both the traditional and larger captive community seek these same efficiencies. The report predicts continued M&A activity in the insurance world this year as well, so hold on to your hat (or captives).

And speaking of acquisitions, I want to take this opportunity to introduce our new part-time staffer here at VCIA, Dave Rapuano. Dave will assist with VCIA communications and webinar initiatives and is a recent graduate of Champlain College with a degree in Graphic Design and Digital Media. His skills and experience will be a wonderful asset to our great team – welcome Dave!

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