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Captive-Trends 2018

Captive Insurance Issues and Trends 2018

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Commutations, Loss Portfolio Transfers, and Assumptions for Runoff

Steve McElhiney-SF
February 26, 2018

A new Captive Thought Leader Video featuring Steve McElhiney, president and CEO of EWI Reinsurance, titled "Commutations, Loss Portfolio Transfers, and Assumptions for Runoff," has recently been added to the Captive.com library.   

Mr. McElhiney explains that different core reinsurance transactions may be employed to manage runoff liabilities depending on what drives the transaction. If an insurance company goes into liquidation, liabilities are paid off on a pro-rata basis. As a proactive measure, a reinsurer may look to approach the insurer to transact a negotiated settlement. Such a negotiated transaction can take the form of a commutation of reinsurance recoverables. A loss portfolio transfer allows an insurance company to carve out a portion of its business for a variety of reasons, such as a strategic exit or windup, and transfer these liabilities to a counterparty in exchange for payment. An assumption agreement transfers out a company's entire book to unwind all transactions by making a reinsurer directly liable to the insured for in-force risks by effecting a novation.

This section of the site currently features 66 short educational videos by 13 captive insurance experts. Among the topics covered in the 1–3-minute videos are runoff transactions, micro-captives, tax issues, captive feasibility, captive domicile selection, choosing an auditor, captive management, group captives, healthcare captives, risk pooling, common myths about captives, how to manage a captive efficiently, what makes a captive successful, and benefits in captives.

Along with Mr. McElhiney, the captive insurance experts featured in the videos include the following.

  • John Alberici, chairman, Alberici Corporation

  • Gary Bowers, tax partner, Johnson Lambert

  • Jeremy Colombik, president, Management Services International

  • Martin Ellis, manager of Comerica Bank's global and captive insurance group

  • Martin Eveleigh, chairman, Atlas Insurance Management

  • Alan Fleming, chairman, Airmic

  • Debbie Liebeskind, actuary, Human Resources, Towers Watson

  • Michael Maglaras, principal, Michael Maglaras & Company

  • Michael O'Neill, president and CEO, American Contractors Insurance Group

  • Hugh Rosenbaum, retired principal, Towers Watson

  • Bruce Wright, partner, Eversheds Sutherland (US)

  • Brady Young, president and CEO, Strategic Risk Solutions

Each of these captive insurance thought leaders has decades of broad experience with captive insurance companies, and they freely share their expertise in the videos. This collection constitutes a wealth of information on captive insurance fundamentals that will be especially valuable to newcomers to captive insurance. By watching one or two of these informative videos each day for a month, you will hone your knowledge of captive insurance fundamentals and trends.

There is no cost to view the videos, and you will find them in the Captive Thought Leader Videos section of Captive.com. More videos will be added in the future.

(Mr. McElhiney is pictured above.)

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