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NAIC President Julie Mix McPeak Addresses a Captive Crowd

Julie McPeak CICA-SF
March 20, 2018

Tennessee Insurance Commissioner, National Association of Insurance Commissioners (NAIC) president, and long-time captive insurance champion Julie Mix McPeak recently addressed Captive Insurance Companies Association (CICA) 2018 International Conference attendees. 

Ms. McPeak stated that she is "most proud to be a part of the captive insurance industry and to have watched the evolution of the risk management programs that have been successfully incorporated into captives."

She has found the captive insurance industry to be highly responsive, "from health insurance solutions in the continually contracting commercial market to new risks that traditional insurers are hesitant to address, like cannabis, cyber security, and big data."

However, Ms. McPeak said that the regulatory environment has its challenges. "The state-based system of insurance regulation in the United States is under frequent scrutiny by our federal and international colleagues, particularly as it relates to financial oversight and group supervision of systemically important insurance groups." 

According to Ms. McPeak, the captive insurance industry is part of the debates around these issues "because of captives that finance and securitize capital and reserving requirements in the United States, specifically because [of] the transparency differences that exist between captives and the commercial [insurance] market for these financing mechanisms."

Ms. McPeak added that those at the NAIC hold dual competing roles that encompass consumer protection and a healthy and vibrant marketplace. The NAIC believes that "competition is one of the best consumer protections that [it] can afford."

In closing, Ms. McPeak maintained that, while many global and federal regulators think "additional conservatism is the way to ensure consumer protection," the NAIC does not share this belief. She explained that "until the time that we can work to demonstrate [that] our reserving and capital requirements are more appropriate for the industry, we are looking to prove that we are responsible supervisors of large insurance groups that may contain captive insurers."

(Photo above is courtesy of Captive Insurance Companies Association.

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