Captive Resource Center

Businesses and Associations

Research & Information

Mancini's Musings on the Inaugural SRS Symposium

By Chris Mancini
CEO and Partner, Captive.com, LLC

[Also see Hugh's Views on lessons traditional insurance companies COULD learn from captives! While you're there, you'll love Hugh's astute closing limerick.]

When Strategic Risk Solutions invited me to attend their first Client Symposium at the Ritz-Carlton in Sarasota, FL from May 11-13, I must admit I had mixed emotions. Yet another conference? Would it be more of the same old, same old? Sure, it's fun to renew old friendships and catch up with friends at conferences. Sure, some events are better than others. But, no matter how good the conference is, we all need to carefully pick and choose which events we will attend to allow ourselves the luxury of keeping up with the demands of running our respective businesses, right?

But this event held promise. It could be quite different! Attendance was by invitation only, limited to SRS's clients, business partners, and speakers. Hmmm...a small event, heavily attended by captive owners? This was something that a computer nerd -- hungry for the perspective that only captive owners can bring -- couldn't resist! Laptop in tow, I dutifully submitted myself to marginally-abusive airport security courtesy of TSA (no, I wasn't selected for the naked body scanner or the sexual assault procedure -- only a hand swabbing for explosive residue and a search through my suitcase, no doubt due to my terrorist-like appearance). With a big smile and great anticipation, I headed south.

Over 100 of SRS's clients attended the Symposium, along with 20 or so business partners and speakers. The atmosphere was friendly and informal -- right up my alley! I met dozens of captive owners and risk managers, listening to their unique perspectives on how they are using their captives to collaboratively improve their underlying businesses.

"Collaboration" between the captive and the owner was mentioned time and time again in numerous presentations as the "win-win" that only a captive insurance structure can offer to its owner. There was also much discussion on captives' responses to evolving challenges in our industry and in the economy as a whole. The event turned out to be truly extraordinary.

SRS treated the delegates very well indeed, and their planning was impeccable, thanks to the hard work done by Courtney Flynn. Hats off to Courtney!

John McCarthy, President of CRICO, set the stage for the Symposium, as he exploded out of the starting blocks with an opening session entitled, "A Study in Adapting to a Changing Environment." CRICO is a forward-looking captive whose stated mission is to "...provide a superior medical malpractice insurance program to our members, and to assist them in delivering the safest healthcare in the world." The company was formed in 1976 in response to the MedMal crisis, and has continued to grow and evolve since then through a collaborative partnership with the company's member organizations, all leading to impressive patient safety initiatives that benefit all. [Use this link to learn a bit more about CRICO.]

John placed a good deal of emphasis on the captive's board composition, selection and ongoing board training. He also detailed the company's complex structure in both Cayman and Vermont. CRICO's purpose shines through the technical details. By focusing on CRICO's investments in patient safety, the company's rate of paid claims is impressive. For example, in 2008, CRICO paid only 4 claims per 1,000 physicians. By comparison, Massachusetts paid 7.3 claims per 1,000 physicians; California, 7.8; New York, 15.6; Pennsylvania 15.7. The national average that year was 11.2 paid claims per 1,000 physicians.

McCarthy closed his presentation by sharing how CRICO is preparing for future changes, then answered numerous questions from the audience.

After CRICO laid the foundation for the Symposium, remaining sessions moved in rapid-fire fashion, covering the following topics:

• Tax Developments, Opportunities & IRS Challenges -- Who can handle such a session, and make it understandable to non-tax professionals? None other than Dewey & LeBoeuf's Bruce Wright and McDermott, Will & Emery's Tom Jones, of course! Great job with a tough topic!
• Captive Audit Roulette featuring John Ferrari and David Rood from KPMG.
• Investment Returns to Remember led by Hugh Barit of PRP Performa Ltd and Anne Kennedy with CapTrust Advisors, LLC.
• Enterprise Risk Management for Captives showcased by John Lochner from Towers Watson and Bob Wallace from Susquehanna Healthcare.
• Avoiding Affronting Relationships -- An excellent, unscripted session where PMA's Ray Rocchio, Great American's Sarah Berger, and Discover Re's Lawrence Cook spoke from their own knowledge, straight from their hearts, roaming about the room with microphones in hand. The three presenters responded to a barrage of questions from an enthusiastic, appreciative audience. This was among the best sessions I have heard at a captive event, using a format that was quite remarkable considering the large audience.
• How to Sleep Better at Night -- A session featuring Nicholas Bozzo from Negley and Associates and Russell Young from Primmer, Piper, Eggleston & Cramer. Nick and Russell discussed how a captive can respond to exposures for Captive Directors and Officers.
• Deep Dive Workshops -- Delegates chose between "Hot Issues for Healthcare Captive Owners," "Rent-a-Captives," and "Asset Management/Capital Optimization." Predicatly, the Healthcare session received the heaviest attendance.
• Day One closed with Captive Owners Closed Door Sessions. No problem...a run through the nearby marina and park was delightful.
• When the IRS Knocks -- Oh, may it never happen. In this session, Chaz Lavelle discussed how to reduce the risk of having the IRS audit your captive, and what to do when they come knocking.
• Regulatory Drum Beat -- Who better than SRS's own Derick White and Craig Watanabe to do such a session! Derick and Craig gave an insider's view of the regulatory process, and shared their perspective on how captives can avoid problems.
• Maintaining Relevance -- Keys to Captive Success and Survival. This closing session, led by the always-exciting and often-provocative Hugh Rosenbaum, tied the entire Symposium together. As Hugh often says, "Captive business is the best business." His seminar demonstrated in no uncertain terms why this is so. Hugh closed the session with one of his trademark limericks in tribute to SRS. I think I saw Brady Young blush....

[Follow this link to Hugh's Views explaining lessons traditional insurance companies COULD learn from captives! While you're there, you'll love Hugh's astute closing limerick.]