Monday, February 26, 2024

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CBIZ completes captive formation in Vermont

Professional services firm CBIZ has established a single parent captive in Vermont in response to seeing rates and deductibles increase and wanting to put in a long-term risk financing strategy.

Rockside Insurance Company was licensed on 15 March and will be managed by Strategic Risk Solutions.

Kristen Peed, director of corporate risk management at Cleveland, Ohio headquartered CBIZ, joined Vermont’s deputy commissioner for captive insurance Sandy Bigglestone to discuss the company’s rationale and journing in establishing the captive for a GCP Short recording at the CICA International Conference in March.

“We really started looking at a captive during the hard market because rates were going up, our deductibles were going up,” Peed said.

“But my proposition to our senior leadership was really looking at it from a long-term strategy. How could we utilise it five years from now, 10 years from now?

“CBIZ is a growing company, we’ve doubled in size since I joined, and so our risk needs are going to be very different in the future than they are maybe right now.

“Starting this captive journey and getting through it, it’s been pretty exciting to see what we might be able to do with it in the future as well.”

Bigglestone explained that Vermont’s mantra that “when you’ve seen one captive, you’ve seen one captive”, originally coined by Ed Meehan in the 1980s means that while some business cases for formations may look familiar, it is the job of the regulator to look at each application in a unique way and review it on its merits.

“We see how they’re articulating their business plan, we see their mission as an organisation, we understand how they approach their risk management and have a robust risk management and loss prevention programme,” Bigglestone said.

“And those are sort of the things that we see that often differ from other organisations, even writing the same lines of business.

“So we appreciate each company on its own merits and I’m very excited for this application and seeing it through and seeing how it develops and evolves in the next few years.”

Peed said that although there were some frustrations along the way, she enjoyed the full formation process, from issuing requests for proposals (RFPs) and the feasibility study, to domicile selection and the application itself.

“One of the best things that I enjoyed about the process was getting to know our finance department at CBIZ,” she added.

“Several of them are going to be sitting on our board with me and so that’s been really neat.

“And then working with the different service providers and the regulators in Vermont.

“You can tell that the calibre of service providers in Vermont is really high because they know what they’re doing and I think it makes something that could be frustrating, more enjoyable.”

Listen to the full 17-minute episode with Sandy and Kristen here, or on any podcast app. Just search for the ‘Global Captive Podcast’.