Captive Insurance News

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

A FREE 12-page special report from

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance explores the challenges presented by today's business and economic upheaval, as well as the hardening insurance market, and what it means for the captive insurance industry.

Show Me My Free Report

Charles Kolodkin—Captive Owner of Interest

October 23, 2017 spoke with Charles Kolodkin to discuss his role in overseeing Cleveland Clinic Health System's insurance program and captive operations. Cleveland Clinic is one of the country's largest healthcare organizations, whose flagship facility is consistently rated among the nation's top five hospitals. At a glance, Cleveland Clinic has $8.3 billion in annual revenue with 51,000 caregivers; 3,600 employed physicians; 4,435 beds; 220,000 hospital admissions; 652,000 emergency visits; and 7.1 million outpatient visits. 

You have an extensive résumé. Please tell us about your current position and experience.

I am the executive director of enterprise risk and insurance at the Cleveland Clinic Health System. My responsibilities encompass all risk management activities of the Cleveland Clinic Foundation (CCF) and Health System, including risk finance, captive operations, managing claims, overseeing and analyzing risk management data, conducting educational programs, and administering the risk management program. I joined CCF in 2005, relocating from Texas after working at Arthur J. Gallagher & Company and Texas Health Resources for almost 20 years. 

I received my bachelor's degree from Miami University (Ohio) and, after working for a pension consulting company for a couple of years, decided to pursue my MBA at University of Georgia, focusing on risk management and studying with Professors E.J. Leverett, Mark Greene, and Jim Trieschmann.  

Following my undergraduate studies, I took a risk management job with an oil services company in Texas before transitioning to health care in the 1980s. Because my risk management responsibilities included contract review and litigation, I went on to law school, ultimately receiving my JD degree in 1997 from Texas A&M University School of Law.

This combination of financial and legal education and experience has provided me with a comprehensive understanding of the challenges and risks businesses face. More importantly, it has enabled me to display creativity in implementing effective solutions to complex problems.

Describe the Cleveland Clinic (CC) captive insurance company, CCHS Indemnity Company, Ltd. (CCHSICo), its formation, and its evolution.

CCHSICo was formed in 1997 to insure CC's healthcare professional liability (medical malpractice) exposures. This is a common risk financing approach utilized by hospitals and healthcare organizations. There have been waves of captive insurance company formations in the 1980s, 1990s, and 2000s, usually in response to hardening insurance markets. In fact, I formed a healthcare captive in Vermont in 1987 during that decade's malpractice insurance crisis.

CC's captive strategy was at first more reactionary (i.e., responding to insurance market forces and changes occurring in the healthcare delivery environment, such as hospital consolidation). Interestingly, CC formed a second captive in 2004 to address concerns certain acquired hospitals had about governance and financial risk. Ultimately, we dissolved the second captive by amalgamating its assets and liabilities into CCHSICo. Over the past 10 years, CCHSICo has become an integral part of CC operations and is a crucial vehicle to improve patient care as well as support CC strategic objectives. One example of this is our risk management grant program whereby CCHSICo helps fund innovative ideas designed to reduce liabilities. Another example is making malpractice insurance more available and more affordable to independent medical staff members.

What do you consider to be the most significant healthcare industry trend?

One of the most notable trends is the change in the reimbursement process to providers in which payment is transitioning from fee-for-service to a value-based arrangement. Providers such as hospitals and large physician groups will be compensated in bundles or lump sums presenting greater risk to the organization. One result of this change is the reemergence of provider stop loss insurance to protect healthcare organizations from potential losses caused by these at-risk contracts. I say reemergence because it harkens back to the mid-1990s when capitation was prevalent. I foresee healthcare captives insuring their parents' provider stop loss risks similar to what we did with our Vermont captive 20-plus years ago.

What has been the most rewarding experience in your career?

No single experience stands out, but rather making and leaving my imprint on the industry is the most rewarding aspect of my career. This has been accomplished by developing innovative risk funding programs such as hospital-sponsored malpractice insurance coverage for independent physicians in 1992, reinsuring provider stop loss in 1996, and writing stand-alone tail coverage for physicians in 2006. Similarly, but more importantly, I consider it a privilege and almost an obligation to mentor or educate others in the principles of risk management so they can hone their decision-making skills to meet the professional and personal challenges they will surely face.

charles-kolodkin-SFWhat is in store for the future of Cleveland Clinic's captive?

CCHSICo will continue to support the mission and strategic goals of CC. I foresee it growing and being able to take more risk, perhaps in emerging areas such as network security and cyber-liability.

Mr. Kolodkin, pictured at right, has submitted a collection of Expert Commentary articles that have been published on Please see some of these articles referenced below.

Related Articles

Captive Insurance Company Reports
Follow on Twitter

Twitter Feed