Michael Maglaras & Company Secures Additional Captive Financing
June 28, 2021
Captive organizational and consulting firm Michael Maglaras & Company has secured another $100 million of financing from the State of Connecticut to support Connecticut Foundation Solutions Indemnity Company, Inc. (CFSIC).
"The passage, by an overwhelming majority of both the Connecticut House and Senate, of another $100 million in financing for the CFSIC captive, effective July 1, 2021, signals state government's confidence in our captive underwriting platform," Michael Maglaras, principal of Michael Maglaras & Company, said in a statement.
Michael Maglaras & Company formed CFSIC in 2018 at the request of the Connecticut state government as a captive underwriting program dedicated to the payment of property claims associated with the residential crumbling foundations crisis in the state.
"Mike Maglaras and his team have proven that they can create a captive management structure able to tackle the terrible crumbling foundations crisis," Rep. Jeff Currey, deputy majority leader of the Connecticut House, said in the statement. "I've seldom seen a government/private partnership work this well in my political career."
The foundations of thousands of Connecticut homes are affected by "crumbling concrete," which occurs when the mineral pyrrhotite exists in concrete aggregate and causes, through oxidation, the eventual failure of the foundation structure. In 27 months, CFSIC has, through its unique electronic underwriting platform, identified almost 2,000 claimants and has already put more than 300 families back in safe and secure homes.
Because of the effective way in which CFSIC works as an underwriter, Mr. Maglaras has secured, as well, financial support for claimants from three major insurers: the Hartford, the Travelers, and Liberty Mutual.
"This is about the most perfect use of a captive insurance company I can imagine," Mr. Maglaras said. "We've got the expertise and know-how to manage the underwriting process, and the State of Connecticut has the funds. It is the ultimate public-private partnership."
CFSIC has already received pledges of more than $120 million from state government, and this extra boost will "wipe out this crisis for another generation," Steve Werbner, CFSIC's board chairman, said in the statement.
CFSIC was formed as a Connecticut-domiciled captive insurance company. In 2019, it received tax-exempt status from the Internal Revenue Service.
"I've assembled a great team, and nothing like this can be done without a great team," said Mr. Maglaras. "I'm supported by my colleagues at ESIS ProClaim, Marsh, Paul Frank + Collins, Crowe LLP, and Milliman. This has been from day one a team effort and continues to be, as we use an innovative captive insurance structure to solve an insurance coverage as well as an economic crisis."
June 28, 2021