Captive Insurance Issues and Trends 2017
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A.M. Best has affirmed positive financial and credit ratings of Blue Whale Re Ltd. This is the Vermont-domiciled single-parent captive of pharmaceutical giant Pfizer. The company received a positive Financial Strength Rating of A (Excellent) and a Long-Term Issuer Credit Rating of "a+."
A panel discussion on corporate governance of risk retention groups (RRGs) at the 2017 Captive Insurance Companies Association (CICA) Conference provided a useful way to categorize RRGs. RRGs can be divided into one of three categories based on whether there is a sponsor and, if so, the type of sponsor.
Randall & Quilter Investment Holdings Ltd. (R&Q) has acquired ICDC, Ltd. (ICDC), a captive insurer of an American Fortune 500 company. The company, originally domiciled in Bermuda, was redomiciled in Vermont effective June 30, 2015. The company reinsured workers compensation, commercial general liability, business auto liability, business auto physical damage, and property risks.
In a new briefing, A.M. Best reports European cedants have increased reinsurance buying despite slowing demand. This trend is driven by a diverse range of factors, including regulatory demands under Solvency II and the need to support product diversification, including new lines of business.
Randall & Quilter American Holdings Inc. (R&Q) has agreed to acquire Bermuda-based Linco Ltd. (Linco), a wholly owned captive insurer of AmeriPride Services, Inc. and Alsco Inc. The transaction is subject to regulatory approvals, which are anticipated within 30 days.
A new report from the International Association of Insurance Supervisors (IAIS) highlights the potential impact of innovative financial technologies (“FinTech”) on insurance sector competitiveness, consumer choice, interconnectedness, business model viability, and regulatory oversight. The report, titled "FinTech Developments in the Insurance Industry," also examines the challenges and opportunities for insurance supervisors.
The 2017 Captive Insurance Companies Association (CICA) Conference, Defying Disruption, focused on talent management as one key aspect for captives. In his opening remarks, CICA president Dennis Harwick noted that 25 percent of the captive insurance industry workforce will retire in the next 5 years. This certainly set the stage for the keynote address and session topics to focus on the need to attract and retain talent.
In a letter to Treasury Secretary Steven Mnuchin, four insurance industry trade groups reiterated their strong support for the Covered Agreement negotiated by the United States and European Union to resolve prudential insurance and reinsurance matters. They believe the Agreement makes US insurers competitive in the European Union and recognizes the strength of the US insurance regulatory system.
The National Risk Retention Association filed an amicus curiae brief in support of Restoration RRG in its recent court appeal, challenging the Wisconsin Department of Safety and Professional Services for discrimination against risk retention groups.
The Captive Insurance Companies Association (CICA) has elected a new board chairperson and new officers and directors. Sarah Pacini, J.D., chief executive officer, Cooperative of American Physicians, Inc., has been elected chair of the Board of Directors.