Regulation and Oversight
Legislation now nearing final approval by Vermont lawmakers would ease reporting requirements for new captive insurance companies. Under the measure, S.88, captives, before receiving a license, would have to file a copy of their organizational documents with the state insurance commissioner along with any other documents requested.
Existing frameworks such as enterprise risk management minimize the need for government mandates for better governance of sustainability risks, according to the Federation of European Risk Management Associations (FERMA). EU-wide mandatory requirements for due diligence would add administrative costs and could damage competitiveness for European companies, FERMA said.
While time is running out during the current congressional session for federal lawmakers to act on legislation that would allow certain risk retention groups (RRGs) to expand coverages they can offer to policyholders, observers are optimistic, amid hardening market conditions, that consideration will resume next year.
The Internal Revenue Service (IRS) has announced a new limited-time settlement offer to certain taxpayers that the agency alleges participated in abusive micro-captive insurance transactions. The IRS said that in the coming days it will begin sending settlement offers with stricter terms than its first limited-time settlement initiative that began last year.
While risk retention groups (RRGs) can write a wide range of coverages, one line of coverage is dominant: medical professional liability. Of the roughly $3.5 billion in direct RRGs premiums in 2019, well over 50 percent—nearly $1.96 billion—was for professional liability coverage for RRGs' policyholder-owners.
Two years after the implementation of the European Union's General Data Protection Regulation (GDPR), data privacy has become a standard concern of corporate leaders, particularly as they also rank cyber threats among their top risk concerns. The GDPR created a single source of data protection rules applying across Europe.
A reply brief filed in the US Tenth Circuit Court of Appeals on behalf of Reserve Mechanical Corp. in Reserve’s tax case with the Internal Revenue Service argues that its captive insurance arrangements did meet the requirements to constitute insurance for federal tax purposes.