Finance, Accounting, and Investments

  Financial Statements-SF

Accounting Rules Impact Captives Writing High Deductible Workers Comp Policies

Johnson Lambert recently released a new white paper on the revisions to Statement of Statutory Accounting Principles (SSAP) No. 65 regarding high deductible workers compensation policies. Any captive insurers using this type of policy need to be aware of the changes and their impact.
September 20, 2017 Read More
  Accounts Filing Forms-SF

PCAOB Adopts New Standards on Unqualified Audit Opinion Disclosures

Why should captive insurers care about new accounting opinion disclosure standards for public companies? The reason is that they bring the United States into closer alignment with international accounting standards and are likely to become "best practices," even for nonpublic companies.
August 28, 2017 Read More
  Passive versus Active 600x300

The Case for Passive "ETF" Investing Grows Stronger for Captives

For captives, especially smaller captives or group captives, passive investing can help reduce frictional investment expenses in a low yield, total return environment. A recent S&P webinar and "Wall Street Journal" article strengthen the argument for passive investing, thereby reinforcing a case for captives' use of passive investing.
June 28, 2017 Read More
  Stability 600x300

Risk Retention Groups Remain Financially Stable Despite Mixed Reported Results

A review of the reported financial results of risk retention groups reveals insurers that continue to collectively provide specialized coverage to their insureds while remaining financially stable, according to the latest Demotech report on the sector. While risk retention groups have reported net income, they have also continued to maintain adequate loss reserves while increasing premium written year over year.
May 26, 2017 Read More
  Kroll Bond Rating Agency-SF

KBRA Announces New Captive Rating Service

The market for captive ratings just expanded with the announcement from Kroll Bond Rating Agency (KBRA) about its new rating option. We interviewed KBRA's insurance specialists at the KBRA home office in New York, and our Q-and-A examines this new option and how it differs from the model-driven philosophy of other credit rating agencies.
May 08, 2017 Read More
  Passive versus Active 600x300

Is Active Investment Management Facing Extinction?

Today’s financial news headlines are filled with stories about the rise of passive investing as investors abandon active managers. Those who own captive insurers or who oversee management of their portfolios should understand the active versus passive management debate and why active investment management, at least for fixed income portfolios, often makes sense. Active management needs to evolve, but it will survive.
April 04, 2017 Read More
  Financial Statements-SF

Loss Disclosures for Short-Duration Insurance Contracts (GAAP Filers)

The Financial Accounting Standards Board has issued ASU 2015–09 for nonpublic, calendar year-end insurance company filers. This Accounting Standards Update requires additional disclosures to provide better insight into an insurer's initial claim estimates and subsequent adjustments and to help financial statements users understand the frequency, severity, and timing of future cash flows related to the estimated claim costs. This article summarizes the new requirements.
March 22, 2017 Read More
  Machine Learning-SF

Uncertain Times Squared: The Future of Investing for Insurers

What new ideas, technologies, and ways of conducting our lives do we see impacting our economy and financial markets? The future of investing for insurers, in the next 7–10 years, will see artificial intelligence and especially machine learning having a very pronounced impact on our careers, companies, and daily life.
March 06, 2017 Read More
  Expand Captive Horizon

Captive Insurance Industry Looks at What Is Next for Bond Yields, Inflation

One of this editor's favorite songs is Elton John's "Where to Now St. Peter?" from the 1970 album "Tumbleweed Connection." It seems extremely apropos to the bond market after the recent election results.
November 23, 2016 Read More
  Company Rating

Captive Industry and Risk Retention Group Auditing Challenges Discussed

Glenn Saslow, CPA, partner at Crowe Horwath LLP, recently offered a glimpse into his auditing experience with the captive insurance industry.
November 22, 2016 Read More
  Question Mark

Captive Insurers Need To Ask Investment Managers More Meaningful Questions

Alton Cogert, president and chief executive officer of Strategic Asset Alliance, recently posted a blog on the Strategic Asset Alliance website offering the four specific questions that will lead to a more meaningful and useful investment manager meeting.
November 09, 2016 Read More
  Montana Flag

Montana RRG CareConcepts Is in Liquidation

On May 23, 2016, the Office of the Montana State Auditor, Commissioner of Securities and Insurance (CSI), suspended the license of CareConcepts Insurance, Inc., a risk retention group (RRG), allowing the Insurance Department to take control and supervise CareConcepts. On August 8, 2016, the Montana CSI issued a court order, signed by a Montana District Court Judge, to commence liquidation of CareConcepts. On August 10, 2016, CareConcepts was placed into liquidation. Michael J. FitzGibbons, president of FitzGibbons and Company, Inc., was appointed as special deputy liquidator on August 22. Claims against CareConcepts have a deadline of March 31, 2017.
November 08, 2016 Read More
  Downward Trend

Golden Insurance Company RRG A.M. Best Rating Is Negative

The outlook for Golden Insurance Company, RRG, has been revised from stable to negative by A.M. Best, and its financial strength rating of B (Fair) has been affirmed. The revised outlook is worth the review of all in the risk retention group (RRG) community. The rating reflects issues that every RRG should be concerned about as they seek to maintain financial and operational sound companies.
October 25, 2016 Read More

Captive Insurance Analytics, Analysis, History, Recent Events Featured in October 2016 CICR

The October 2016 issue of "Captive Insurance Company Reports" features a broad range of articles that are of interest to captive owners, managers, and staff.
October 12, 2016 Read More
  Drug Money Sign

Interest Rates and Opioids Challenge Workers Compensation Market

The low interest rate environment is "the single biggest problem [for insurers] we have in the workers comp market right now" says John Leonard, president and chief executive officer of Maine Employers' Mutual Insurance Company.
October 07, 2016 Read More
  Dollar Sheet

Captive Insurers Need To Understand New Money Market Rules

The U.S. Securities and Exchange Commission (SEC) recently instituted new regulations governing institutional money market accounts. The historical context for this change dates back to the financial crisis of 2007–2008.
October 05, 2016 Read More
  Washington Monument

CIC-DC 2016 Annual Conference on Captive Insurance

The Captive Insurance Council of the District of Columbia (CIC-DC) will open its 2016 Annual Conference on Tuesday, October 18th, with a networking reception, followed by a full day of educational sessions on October 19th. The Conference will be held at Loews Madison Hotel in Washington, DC.
October 04, 2016 Read More
  The Federal Reserve

Captive Insurance and the Federal Reserve

Most captive owners and managers, if they follow the Federal Reserve at all, probably focus on the pronouncements made from the Federal Open Market Committee (FOMC). The latest release was on September 21, 2016, and concerns the Federal Reserve's short-term outlook and its expectations for changes to interest rates. The release on the 21st contained the following language.
September 29, 2016 Read More
  Money graph

Demotech, Inc., Releases Second Quarter 2016 Analysis of RRGs

According to Demotech's Douglas Powell, the bottom line for risk retention groups (RRGs) at the conclusion of the second quarter of 2016 is "that these specialty insurers continue to exhibit financial stability."
September 23, 2016 Read More
  EU Flag Star

Captive Insurance Industry Brexit Implications Topic of Webinar

Captive Insurance Companies Association (CICA) has scheduled a webinar, titled "Brexit and the Impact on the Captive Industry," to be held at noon (CDT) (1:00 p.m. ET) October 20, 2016.
September 21, 2016 Read More