Captive Insurance News

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  • Reinsurance Sector Won't Earn Cost of Capital in 2020 Due to COVID-19 The global reinsurance industry will fail to earn its cost of capital in 2020 due to the impact of the COVID-19 pandemic, according to Fitch Ratings. Fitch noted that the COVID-19 crisis comes after 3 years of heightened natural catastrophe losses and increasing US casualty claims.
  • COVID-19 Pandemic Slows Pace of Captive Insurance Law Updates While the COVID-19 pandemic has slowed state legislatures' updates of their captive insurance statutes this spring, some states have moved forward in 2020 and passed captive legislation. In other captive domiciles, state lawmakers did not complete action on captive legislation before adjourning.
  • Legislation To Create TRIA-Like Federal Pandemic Backstop Introduced A bill that would create a federal pandemic risk backstop has been introduced in Congress. Rep. Carolyn B. Maloney (D-NY), senior member of the House Financial Services Committee, introduced H.R. 7011, the Pandemic Risk Insurance Act of 2020, on Wednesday.
  • US Property-Casualty Market Hardening Continues in First Quarter: CIAB Commercial property-casualty insurance markets continued to harden in the first quarter of the year, with some lines seeing their largest increases since the September 11, 2001, terrorist attacks, according to the Council of Insurance Agents & Brokers (CIAB). Premiums increased by an average of 9.6 percent in the first quarter.
  • FERMA Seeks EU Financial Resilience Framework for Catastrophic Risks The Federation of European Risk Management Associations (FERMA) has called on the European Commission to create a European Union business interruption resilience framework for catastrophic risks. FERMA called on the commission to address the "severe shortage" of business interruption insurance for disruptions that don't involve physical damage.
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FERMA Task Force Looks To Address Nondamage Business Interruption

The Federation of European Risk Management Associations (FERMA) has launched a task force to create proposals for addressing business interruption coverage for catastrophic risks that don't cause physical damage. The task force, which includes senior risk managers from FERMA members, plans to publish initial results by the end of May.
May 08, 2020 Read More
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North Carolina Captive Group Seeks Relief from IRS Micro-Captive Letter

The North Carolina Captive Insurance Association (NCCIA) is one of a number of state captive insurance associations protesting recent Internal Revenue Service (IRS) activities aimed at micro-captives. The NCCIA wrote North Carolina's congressional delegation for help in securing relief from a letter the IRS sent in March to micro-captive owners.
May 08, 2020 Read More
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SRS Adds Derek Bridgeman, Expands European Consulting Team

Derek Bridgeman is joining captive management and consulting services provider Strategic Risk Solutions (SRS) as part of an expansion of the firm's European consulting team. Mr. Bridgeman will join the firm's European operations May 18 as managing director and will develop and lead SRS's risk consulting practice in Europe.
May 07, 2020 Read More
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Michael Corbett Rejoins Tennessee Captive Insurance Association Board

Michael Corbett, senior vice president at Pinnacle Financial Partners, has rejoined the board of the Tennessee Captive Insurance Association (TCIA). Mr. Corbett, a founding board member of the TCIA, left the board in 2011 when he became director of the Captive Section in the Tennessee Department of Commerce and Insurance.
May 07, 2020 Read More
  Hands Holding We Are Open Sign after Pandemic

For Businesses Coping with COVID-19, Varying Responses Add Complexity

As businesses cope with the COVID-19 pandemic and move toward reopening, the management of the process—and the risks involved—can vary significantly from country to country. A panel of risk managers noted that different pandemic responses employed by various countries add complexity to the process.
May 06, 2020 Read More
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Supreme Court Agrees To Hear CIC Services Micro-Captive Case

The US Supreme Court has agreed to hear the CIC Services, LLC, challenge of the Internal Revenue Service (IRS) position that micro-captives are "transactions of interest" that should be reported to the IRS. In 2019, a federal appeals court upheld a lower court ruling supporting the position of the IRS.
May 06, 2020 Read More
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Demotech Analysis Finds RRGs Financially Stable, Adequately Reserved

Despite political and economic uncertainty, risk retention groups (RRGs) remain financially stable and continue to maintain adequate loss reserves while increasing written premiums, according to an analysis of RRGs' 2019 financial results by Demotech Inc. RRGs were domiciled in 20 jurisdictions in 2019, according to Demotech.
May 05, 2020 Read More
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Analysis Sees US, UK Insurer COVID-19 Losses Exceeding $32 Billion

A "moderate" loss scenario for property-casualty insurance lines most likely to be affected by COVID-19 in the US and UK markets could reach $32 billion, according to an analysis by Willis Towers Watson, while a "severe" scenario projects $80 billion in losses.
May 05, 2020 Read More
  David Lang, Principal and Consulting Actuary, Milliman

Writing Third-Party Business May Provide Captives Tax Advantage

The biggest advantage to writing third-party business through a captive insurance company is that it may provide a tax advantage, according to David Lang, principal, consulting actuary with Milliman. An organization may be able to defer taxes on its unpaid claim liabilities, much like an insurance company.
May 04, 2020 Read More
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New CICA Webinar Series Delivers On-Demand Captive Insurance Education

The Captive Insurance Companies Association (CICA) is launching a webinar series that will feature more than 20 on-demand webinars covering a variety of captive topics. The 2020 webinar series, "Building on the Best," will provide more than 20 hours of education, with CICA rolling out 3 new webinars each week.
May 04, 2020 Read More
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