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Captive Insurance License Approved for Arkansas Healthcare Provider

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January 27, 2016

Arkansas Insurance Commissioner Allen Kerr has announced the approval of Diamond Risk Insurance, LLC, a subsidiary of Little Rock, Arkansas-based Baptist Health.

Baptist Health is the first entity in Arkansas to create its own captive insurance company, Mr. Kerr said in an Arkansas Insurance Department press release.

This is "... a move that will blaze a trail for more Arkansas companies to offer insurance coverage to their employees," Mr. Kerr said, as quoted in the press release.

"By creating its own captive insurance subsidiary, Baptist Health reduces its dependence on the year‐to‐year volatility of purchasing insurance on the commercial market," Mr. Kerr continued in the press release.

Arkansas Business, in a January 26, 2016, article by Mark Friedman titled "Baptist Health Forms Insurance Company," quotes Bob Roberts, executive vice president of Baptist Health, as saying the captive will "help us with the self-funding we do for several of our coverages, including liability coverage, including workers' comp for our employees."

Mr. Roberts is quoted in the article as saying the coverage to be provided does not include health insurance. 

The captive will help Baptist Health avoid paying administrative costs to a third-party administrator, control costs, and avoid going through the annual insurance renewal process, according to Ryan James, an Arkansas Insurance Department spokesman who was also quoted in Mr. Friedman's Arkansas Business article.

Baptist Health is one of Arkansas's largest private companies and has more than 8,000 employees, the Arkansas Business article said. Baptist Health self-funds its health insurance and uses the claims administrator Health Advantage, which is co-owned by Arkansas Blue Cross & Blue Shield and Baptist Health, the Arkansas Business article said.

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