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Alabama Captive Association – Presentation by Captive Insurance Companies Association Alabama Captive Association – Presentation by Captive Insurance Companies Association

Alabama Captive Association – Presentation by Captive Insurance Companies Association - PowerPoint Presentation

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Uploaded On 2020-08-27

Alabama Captive Association – Presentation by Captive Insurance Companies Association - PPT Presentation

Steve McElhiney CICA Board Chair Captives and CICA Moving Forward Adopt a watching strategy on Regulatory risks Broad based networking amp Student Initiatives Captive Innovation CICA Today ID: 803685

cica captive association insurance captive cica insurance association risk state management networking industry amp companies reinsurance business company development

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Presentation Transcript

Slide1

Alabama Captive Association – Presentation by Captive Insurance Companies Association (CICA)

Steve

McElhiney

– CICA Board Chair

Slide2

Captives and CICA – Moving Forward

Adopt a watching

strategy on Regulatory risks

Broad based networking & Student Initiatives

Captive Innovation

Slide3

CICA Today:

Building on partnerships

Going more global -

ECIROA Offering more education Networking Focusing on next generation Advocating on many fronts

Slide4

Domicile-neutral trade association for captive industry 400 members, representing 27 countries Early objectives still drive CICA today

Best Practices Professional Development

Networking Advocacy Education

Captive Insurance Companies Association

Slide5

CICA – Amplify Women

Foster education, influence and networking among women in the captive industry

Focus on more speaking and publishing opportunities for women

Focus on opportunities to serve on Boards

Focused networking opportunities

Slide6

CICA Meeting – Student Essay Contest 2019 was first year – excellent feedback

2020 – increase RMI programs

Mentorship Program – foster leadership and development of young Captive professionals

CICA – Student and Industry Initiatives

Slide7

CICA has formed the Captive Association Leadership Council (“CALC”) with various State and international captive association leadersMeetings 2 to 3 times per year to discuss emerging and advocacy issues that affect all domiciles

States are looking into economic impact studies of captive industry’s impact

Discussions of a Washington DC trip to meet with state delegations

CICA – CALC

Slide8

CICA – Regulatory Challenges

Regulatory overreach

National Association of Insurance Commissioners (NAIC)

Organization for Economic Cooperation and Development

(OECD)

Base Erosion and Profit Shifting (BEPS)

State overreach

States seeking tax revenue – Washington State

Home state

Slide9

Tall Pines Insurance Company (Vermont Single Parent Captive)

AM Best: “B++”, Stable, IV

9

Slide10

Contran Controlled Units

Contran Corp (Private Corporation)

NL Industries (NYSE & NL)

Valhi, Inc. (NYSE: VHI) Holding Co Kronos (NYSE: KRO) Chemicals

CompX (NASDAQ: CIX) Security Products, Marine Basic Management, Inc. Utilities and Land Development

10

Slide11

Why Form the Captive, Tall Pines Insurance Company?Risk management evolutionInsures only the risks of affiliated companies

Premiums are based on the loss experience, not overall industry rates

Eliminates insurance company overhead

Offers potential for lower, more stable premiumsCaptures investment income on premium and capital contributionsManuscripted policies—useful in energy nicheEconomic value accretion—tax neutral since inceptionSet deductibles—drives risk management culture at business unitsSome insurance outside of captiveAllows direct access to international reinsurance markets, which normally have lower costs and a greater willingness to underwrite risk

Slide12

TPIC—Business Strategy

Independent profit center

Fundamental premise—managed in manner consistent with external P&C companies

Managed on an ROE basis—capital managementPreservation of CapitalBusiness model is exclusively focused on internal risks at this pointExperience with third party assumed business was poor (early 80’s)Placement strategy (reinsurance or primary insurance) is based on market conditionsPeriodically examine potential to retain more risk within the captive

Slide13

TPIC—Captive Business Model

Risk into Captive

Reinsurance Overview

Reinsurance Process

Slide14

TPIC—Our Success FactorsA long-term focusInsurance Operators involved with captive

Run like an insurance company.

Tax neutral—not a consideration—Risk Management tool/platform.

Active involvement in our state of domicile .Cultivate long-term partnerships with our carrier supporters.Alignment of interests.Risk Management & Safety are in our DNA.

Slide15

WHAT CAN CAPTIVE PROFESSIONALS DO?

Tell a better story about captives

Get involved with your local association and CICA

Increased scrutiny is not going away Need to be part of a discussion Together we have a stronger voice