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