Connecticut Captive Insurance Association

Monday, July 17, 2017

Agenda for the 2017 Fall Collaborative

We've been promising you an interesting agenda for the upcoming October 2017 CCIA Collaborative. We’re posting a synopsis of the agenda to get you thinking about the topics you’d like to participate in. When I say participate...there’ll be lots of time for attendees to interact and offer their thoughts...whether it be on the improved use of Small Business Captives, InsureTech and the coming revolution in the use of captives, integrating workers’ compensation with off-the-clock disability programs, or what we see as an increasing need to use captives to round out capacity in the cyber insurance marketplace. 


There will be something at the CCIA Collaborative in October that you’ll want to hear about, want to participate in, and want to add to. We look forward to seeing you on October 25 and 26 in Stamford, Connecticut. To register, click here


S C H E D U L E

The Connecticut Captive Insurance Association
The 2017 Collaborative on Captive Insurance
The Sheraton Hotel
700 East Main Street, Stamford, CT 06901

“Creating the New Captive Revolution” 

October 25, 2017

3:00-5:00
Why Haven’t You Formed a Captive Yet?...An interactive discussion on the benefits of captive insurance for your business

5:00-6:30
The Idea Factory:  What Are the Challenging Questions of Our Time? A Roundtable Discussion on Innovation in Connecticut's Captive Marketplace

Topics include:
- Can We Fix the 831(b) Captive Problem?
- Why Can’t We Write Direct Workers’ Compensation in Captives?
- InsureTech: Being Captive to the Future
- Cyber Liability in Captives: Is It Time?

Speakers:
- Michaell Fitzgibbon, Slice, Inc.
- Michael Maglaras, Michael Maglaras & Company
- Tom Reagan, Marsh
- Michael Serrichio, Marsh

Moderators:
- Thomas Hodson, SOBC Group
- Janet Grace, Director, Captive Division, Connecticut Insurance Department

6:30-7:30     
Cocktail Reception with Exhibitors- Sponsored by Michael Maglaras & Company


October 26, 2017
(Many Speakers to be Announced)

7:30-9:00       
Registration, Continental Breakfast and Networking with Exhibitors

7:30-8:30
Networking Breakfast: Meet and Greet the Connecticut Insurance Department Regulators
- Connecticut’s Insurance Commissioner Katharine Wade
- Captive Division Director, Janet Grace
- CCIA Board Chair, Michael Maglaras

8:30- 9:00
The State of the State: Connecticut’s Evolving Captive Marketplace
- Katharine Wade, Insurance Commissioner, State of Connecticut
- Catharine Smith, Commissoner of the Department of Economic and Community Development
- Senator Kevin Kelly

9:00-9:45
Moving the Ball Forward: Idea Factory Breakouts...Session 1

A.  The Small Business Captive Revolution
B.  Redefining Workers’ Compensation in Captives

9:45-10:00
Coffee and Networking

10:00-10:45
Moving the Ball Forward: Idea Factory Breakouts...Session 2

A.  Disrupting the Market: The InsureTech Revolution in Captives
B.  Cyber Liability in Captives: The Evolving Partnership Between Captives and the Commercial insurance Market

10:45-11:45
Keynote Speaker: Glenn Finch, IBM

12:00-1:30
Buffet Lunch, Networking, and “Meet the CCIA Board”

1:30-2:30
The Connecticut Hub for Innovation in Insurance (“CHIINS”) – Incubating Insurance Innovation


2:30-3:00        
Wrap-up: Turning Ideas into Reality

Wednesday, July 12, 2017

Connecticut Captive Insurance Association: Annual Collaborative

During these hot summer days, it's hard to think about the cool wet days of October...but we're pretty excited at the Connecticut Captive Insurance Association about the details of our upcoming annual Collaborative, to be held at the Sheraton Stamford Hotel in Stamford, Connecticut on October 25 and 26, 2017.  

It’s not going to be a “Symposium”…it’s certainly not going to be a “Seminar”…it is absolutely going to be a Collaborative.
For the CCIA Collaborative will be, in fact, all about collaboration. A true collaboration of great minds in the captive business coming together to meet with you, share their views, hear yours…and chart a new course, not only for captives in Connecticut, but for captives everywhere.

Check out CCIA's latest video at this link.
How about workers' compensation in captives?...at the October CCIA Collaborative we'll challenge every notion about how workers' compensation can be underwritten in a captive, including how captives can assist in the coordination of "off the clock" and "on the clock" disability funding and care.
Think you’ve heard everything there is to hear about 831(b)s?...think again. We’re going to blow up the whole notion of what Small Business Captives are all about…to go back to the basics of how these should be formed, should operate, and should be constructed. (This promises to be one of the most interesting sessions at the Collaborative.)
Captives and cyber risk…I know that we think we’ve all heard enough about this, but what we haven’t heard enough about are the solutions needed to quantify risk, mitigate risk, and use captive capacity where it can best be employed, which is alongside the commercial market at this critical time in the world economy.
How about the Sharing Economy? How about insuring the Block Chain transactions of the future?...at the CCIA Collaborative, you’ll hear about this, and, just as importantly, you’ll be able to ask questions, offer comments, and interact with professionals right in the thick of quite literally insuring the future.
For more information about how you can register, click here.
To learn more about CCIA, captives in Connecticut, and why Connecticut is “Still Revolutionary” check out the Association’s latest video at this link.
More than a Symposium; more than a Seminar; always a Collaborative.
Connecticut…the domicile of choice.
- Michael Maglaras, Chairman, Connecticut Captive Insurance Association

Thursday, May 18, 2017

Captive Actuaries Are As Indispensable As Your Traffic App

One of the primary rewards from operating a captive is the ability to place more emphasis on the risk management process, in order to stabilize annual budgets, reduce long-term costs, and utilize capital more effectively. To accomplish these goals, captives rely on experienced service providers to manage almost all of their operations.
An actuary is one of these indispensable service providers. Simply put, actuaries can quantify the level of risk, which allows the company to better manage it. And actuaries provide value throughout a captive’s life cycle, from formation to dissolution (if applicable). Risk factors change all the time, so having an actuary review your experience regularly is crucial to avoiding problems.
Speaking of avoiding problems, we all love the functionality of the Waze traffic app, which steers us from one location to another in the most efficient manner possible. At its core, this traffic app helps you figure out what path to take to avoid unexpected delays, thereby reducing stress levels. Anyone who has traveled I-95 in Connecticut knows this value first-hand.
Actuaries essentially function like a Waze app for captives. They largely provide a means to keep captives on the right path by avoiding surprises and reducing potential for management stress.
Initially, actuaries are engaged in feasibility processes to help ensure a company knows what to expect as it sets out on its journey to create a captive. Where necessary, actuaries utilize data from the local environment (the industry) to supplement the company's own experience. The main deliverable of the feasibility study is a five-year pro forma financial model, which includes a projected income statement and balance sheet of a new captive’s financial business plan. Actuaries provide these projections on both an expected loss outcome basis and an adverse loss scenario basis; this is because it is crucial to understand the potential risks involved, not just what to expect on average. Both the captive business owner and regulator are key stakeholders for whom the feasibility study reduces stress levels right from the outset.
Once the journey begins (the captive is formed), actuaries perform ongoing loss reserving and loss forecasting (budgeting). As the captive’s losses emerge, the actuary has to gauge how much weight to place on an individual insured’s experience versus that of the industry when estimating ultimate losses. This is a delicate balance amidst the “noise” of random variations in losses. In the end, actuaries hold the keys to how fast the captive can travel from a loss recognition standpoint.
Periodically, at least every three years, the actuary should update the pro forma model, adjusting to the conditions of the road map that was created. This provides a continuous means of reasonableness testing of underlying assumptions, including loss ratios, loss development patterns, loss payment (discount) factors, expenses, investment income, taxes, etc.
All of this effort ultimately supports a smooth ride—the issuance of fairly stated financial statements with adequate funding of loss reserves. The actuary’s road map and process needs to be transparent enough to allow another actuary to essentially reproduce the analysis (even though no two actuaries would use all of the same assumptions or necessarily take the same route to the destination). During the process, the captive’s actuary needs to engage in dialogue with the audit firm’s actuary to ensure audit sign-off is secured; this helps to arrive at your final destination from a financial reporting standpoint.
As actuaries, we certainly wish our models could be as straightforward as the Waze traffic app. Even though we face complex questions, our processes and expertise have proven to be successful in navigating the risky terrain of running a captive insurance company. In Connecticut, our tourism branding is “Still Revolutionary.”  In today’s ever advancing age of big data and analytics, using actuaries to help captives take calculated risks to justify the potential rewards noted above is still a state-of-the-art approach.  And the Hartford, Connecticut area has the highest number of actuaries per capita in the United States. Talk about an opportunity. So you may want to consider the Waze-like advantages of using an actuary to help you navigate a new route to establishing a captive in Connecticut.
~ Stephen DiCenso, President

Wednesday, April 26, 2017

Welcome to the Connecticut Captive Insurance Association Blog

A few days ago, as my flight was pulling into the gate, the captain made an announcement. He wanted to thank us for taking the flight and said something like, “Thanks for flying with us...we know you had choices.”
In fact I wish I’d had a choice. I didn’t in this case...but that brings me to the issue of captive domiciles.
Captive owners have choices. They have many of them, for there are many established productive and professional captive domiciles in the United States. All of us captive professionals know this, and we have our preferences. Our clients expect us to recommend domiciles to them that are in their interest, not ours, and for the most part my colleagues in the captive industry don’t steer captives to specific domiciles through force of habit...but for other reasons, such as the experience of regulators, the availability of first-tier services, and a general sense that a captive domicile favors strong and sound regulation, but is also business-friendly in its attitude towards the bearing of risk.
So here comes another captive domicile. Do we need one? Is it necessary? Can another domicile compete favorably with more established and perhaps more visible places for you to warehouse your liabilities and the future of your risk profile?
I think Connecticut is the answer, and if you let us, we’ll develop a strong case for that position.
First, look to the left. You’ll see the email addresses of every member of the board of directors of the Connecticut Captive Insurance Association. (They’re listed alphabetically...no favoritism there.) Contact one of them. In fact, contact more than one. These people are industry leaders. They manage captives; they audit them; they create them; they reinsure them. They’ll give you some reasons why Connecticut should be your destination.
Okay, so you’re not convinced.
Look to the right. Contact Janet Grace or Chris Gallo at the Connecticut Insurance Department. Those are the people who will see and approve your business plan. They will be regulating your captive. Their regulation will be thorough but at every step of the way business-friendly. Find out what kind of people they are and what their oversight will mean to your captive business.
I could also go on and on about Connecticut being the “insurance capital of the United States”...and that’s a statement that I actually happen to believe. But why is that important to you as a captive owner? I could also tell you about the captives that have already chosen Connecticut as a domicile. I could throw a lot of parent names around...and some of the names are names you would recognize.
But, the straight answer is that you should see this domicile for yourself.
In the next few weeks, this blog will highlight legislative changes that will be made to our captive statute, to streamline it, to make it more competitive, and to give Commissioner Wade and her team the flexibility they need to approve and regulate captive formations that stand right at the beginning of new and exciting ways to manage risk in the public and private sectors.
You can come to the Connecticut Captive Insurance Association Collaborative on October 25 and 26 in Stamford, CT. Yes, this will be like a lot of captive symposia: there will be a cocktail hour (with the requisite “heavy hors d'oeuvres”); you’ll get to mingle and network; and, if you’re a service provider, you’ll see all your competitors there so you can figure out who’s talking to whom!
But there will be something more at the CCIA Collaborative. You’ll hear ideas. You’ll hear about something called the Connecticut Hub for Innovation in Insurance (CHIINS), which we’ll be launching this year, and which will be the nation’s first Innovation Hub for alternative risk financing, risk management, and risk innovation debate and discussion. (Imagine “InsureTech” and add to it cutting edge ideas about how to maintain risk and mitigate claim expense and reputational harm...and add, for extra measure, a place where your idea can get the second or the third or the next hearing before you bring it to market.)
And how about the microcaptive “problem”? Well, this year you’ll hear how to do one of these formations correctly from the innovators and regulators who want the reputation of these kinds of captive formations turned around. CCIA has already renamed these Small Business Captives, or SBCs. We at CCIA are committed to going back to the original and really first-class idea behind the 831(b) concept and, through creative and resourceful ways, reinvigorate this useful small business tool that has fallen on hard times.
In short, I do think we need another domicile.
A domicile filled with talented and creative people, who are solution-oriented and who, from the governor of our state on down, are committed to earning your captive business.
Welcome to Connecticut. The domicile of ideas...the domicile of choice.
Michael Maglaras, Chairman, Connecticut Captive Insurance Association