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Strategic Radiology launches group healthcare captive
Strategic Radiology, a nationwide network of independent, private radiology practices, launched group captive SR Health on 1 January, in order to provide coverage for the shareholders and employees of its 32 independent private practice member groups.
Nine member groups with more than 2,000 covered lives are now receiving benefits under the plan, with more of the 32 member groups expected to be onboarded throughout 2023 when existing contracts expire.
In creating a self-funded captive insurance plan, owned by members, the coalition anticipates that members will achieve up to 30% or more savings on premiums, greater control of coverage options, and visibility into plan data.
“The cost of health insurance has become a pain point not just for private practice radiology, but for all employers in the US,” said Scott Bundy, chair at Strategic Radiology.
“Our practices came together, educated themselves on the options, and built an insurance captive program that will lower costs and improve flexibility for our member groups. In exercising an ownership mentality, Strategic Radiology member groups will reap significant cost savings and plan control.”
SR member groups will share risk in the captive layer and partner with vendors with the aim of significantly reducing overall costs.
The plan has been built to maximise value and control at the local individual practice level, minimise disruption of access to existing providers, and maintain economic fairness between high-claims and low-claims groups.
SR said that by leveraging scale and sharing a reasonable portion of risk, the participating groups have effectively eliminated third-party costs on all but the catastrophic portion of risk.
Adam Fogle, CEO of Quantum Radiology, noted that joining the group was an opportunity to assume control over a costly employment benefit and gain insight into expense trends.
“For years Quantum Radiology felt powerless as premiums for health insurance, our largest single overhead expense, marched higher,” he said.
“SR Health gives us an option to provide employees the exact same health benefits while curbing the growth of this major expense item. We retained the same provider choices and will receive quarterly reports on utilization. This level of transparency and control is something we never had with commercial health insurance.”
Captive Intelligence recently published a Long Read exploring how the rising costs of medical malpractice insurance for those working in the US healthcare industry is leading to greater captive utilisation.
NC legislation tabled to extend premium tax holiday for re-domestications
The North Carolina Captive Insurance Association (NCCIA) has introduced an Insurance Revisions Bill, which, if passed, will extend the premium tax holiday for re-domestications until 2025.
In 2022, North Carolina introduced legislation that waived premium taxes for the year in which a captive re-domiciles. It also waives the next year’s premium taxes.
The waiver is designed to encourage captives to re-domicile to North Carolina, but the original legislation did not run for the full two years originally intended.
SB 319, if passed, will extend its application until 1 January, 2025.
“Even with the quirk caused by the shortened allotted time frame North Carolina received and approved seven re-domestications during the period,” said Diana Hardy, NCCIA chair.
“We are confident there will be re-domestications, assuming extension of the legislation.”
North Carolina has been reluctant to introduce and enforce self-procurement taxes on local businesses that utilise out-of-state domiciles, but hopes a premium tax incentive achieves a similar result.
The Tar Heel State licensed 62 new captives in total during 2022, bringing its year-end total to 294 captives plus 730 individual cells. View the full breakdown of 2022 captive statistics here.
SB 319 also proposes to change the retaliatory tax that is applied to risk retention groups (RRGs), reducing the maximum rate language in the statute to 1.85%.
The association had originally planned to ask for a reduction to 2%, but Senator Johnson suggested North Carolina could be more competitive at 1.85%.
The Bill also permits the Commissioner to examine any RRG when he deems it prudent and reasonable, and that the costs for such examinations will be the responsibility of the examined RRG.
SB 319 passed its first reading in the State Senate on 20 March and is sponsored by Senator Todd Johnson and co-sponsored by Senator’s Jim Perry and Benton Sawrey.
The Bill was also in front of the Senate Commerce and Insurance Committee on March 28. All legislation must pass three readings on the floor in each chamber.
Heather McClure joins new captive practice in Oklahoma
Experienced captive professional Heather McClure has left Aon to join Helio, a new risk and insurance services company with international headquarters in Oklahoma City.
Helio will be targeting the Oklahoma business community to provide risk financing, management and consulting for commercial and captive insurance placements.
The practice is led by CEO Blake Kerr, chief strategy officer Kyle Sweet, chief operating officer Ashley Napier and McClure, general counsel and chief risk officer.
McClure spent 14 years with OU Medicine, at the University of Oklahoma, which owns a captive in Vermont, before joining Aon as chief risk advisor in its US healthcare practice in May 2021.
“I’m excited to work with clients to both lower risk in their core business while also making their risk financing programme work for them,” McClure told Captive Intelligence.
“When business leaders see this combination working hand in hand, they get energised about the things that can be done with the funds they are saving, like reinvesting in safety and operations.”
Helio will form and manage captives in Oklahoma and other domiciles, and will target Oklahoma businesses as well as those with operations in the State.
Kerr has extensive experience in accounting, financial operations, consulting and syndicating capital, while Sweet is a lawyer who has represented businesses, individual professionals, and insurance companies across the country while managing complex litigation and advising clients on risk solutions.
Napier is an experienced insurance operations professional, having previously been COO of 3000 Insurance Group, an insurance agency in Oklahoma City.
EY Luxembourg sees EB consulting opportunities, broader captive services
EY Luxembourg’s insurance consulting practice is targeting the captive employee benefits sector and believes it can “complement” existing propositions in the market.
Speaking on a GCP Short released on 29 March, EY partner Emiliano Luzzi and Vittorio Zaniboni, captive and insurance excellence leader, discussed the firm’s decision two years ago to establish an insurance consulting practice in Luxembourg and their focus on employee benefits.
The consulting practice has grown to 13 people with Zaniboni joining in September 2022 having previously been chief insurance officer at General Employee Benefits.
With regards the broader insurance consultant practice that Luzzi oversees, he said he is excited for it to be part of EY’s Global Captive Network.
Luzzi explained they will be focusing on supporting captive owners on underwriting and renewal cycle management, cash flow optimisation, risk appetite and retro protection management.
“It has a long history within EY and is one of the most successful captive service providers amongst the Big Four,” he said.
“With a growing number of captives domiciled in the EU and especially Luxembourg, where we have a lot of companies moving in to establish their captives, our idea is to complement the services offered by our US colleagues by adding additional ones, which can really make a difference in the captive offering space.”
EY has not historically been known for its work on the international employee benefits side of captives, but Zaniboni believes there is a unique role a firm such as EY can play.
“I realised that none of the Big Four were structurally present in providing support to captive from the [employee benefits] consulting side,” Zaniboni said.
“We believe that we can complement the current offer that is out there already. There are a number of entities that are pretty active supporting captives on the EB side, providing knowledge and expertise on the specific benefits that are offered on the different local markets and on the transactional parts of setting up a captive, an EB captive deal.
“While there is not so much support on what I call the insurance side of the equation, meaning running the book, running the captive with EB portfolio insight and being sure that all the governance aspects are properly taken care of.
“It’s true EY hasn’t been very active in this sector so far, but I believe that there are all the necessary elements in the value proposition that we are putting on the market to make it meaningful.”
Listen to the full episode with Emiliano Luzzi and Vittorio Zaniboni here or on any podcast app. Just search for ‘Global Captive Podcast’ and click follow or subscribe.
GCP Short: EY builds captive presence in Luxembourg
In this GCP Short, produced in partnership with the EY Global Captive Network, Richard is joined by Emiliano Luzzi, partner and insurance consulting leader in Luxembourg, and Vittorio Zaniboni, captive and insurance excellence leader, to discuss the recent expansion into Luxembourg.
In a 15 minute discussion, Emiliano tells us about the development of EY’s insurance practice in Luxembourg over the past 18 months and its main areas of focus, while Vittorio explains the role he sees for EY in employee benefits consulting.
For more information on the EY Global Captive Network, visit their Friend of the Podcast page here.
Everen declares $200m dividend, appoints new COO
The board of energy mutual Everen has appointed Robert Foskey its chief operating officer, succeeding George Hutchings who is retiring year, end but will remain with the company for the balance of 2023 as special advisor.
The newly elected board also selected John Weisner as chair and Robert Wondolleck deputy chair for 2023.
Everen recorded a net loss of $776.7m in 2022, driven by net investment losses of $524.8m, net underwriting losses of $229.2m and general and administrative expenses of $22.7m.
Board directors declared a dividend in the aggregate amount of $200m payable on or before 29 September 2023 to shareholders.
Bertil Olsson, president and CEO, said: “While 2022 was financially challenging, our insured losses were within expected levels. Everen is focused on creating long term value and a strong commitment to our shareholders.
“Our goal is to continuously deliver stable and sizeable capacity with consistent terms and conditions through difficult market environments. Over the past nine years, Everen has charged premiums of $4.1bn while returning almost $3bn in dividends to shareholders.
“The Board’s decision to issue the $200m dividend carefully considered the company’s multi-year capital management plan and potential future capital needs of the strategic plan.”
Robert Foskey, senior vice president and COO, said: “During 2022, Everen focused on several strategic plan initiatives including expanding our product offering by increasing the limit to $450m, rollout of the company’s new brand and website, and enhancing our internal and external marketing activities.
“We continue to see strong interest from energy companies around the world and welcomed two new shareholders including CEZ from the Czech Republic and Colonial Enterprises from the United States.”
In a recent interview with Captive Intelligence, Olsson discussed how Everen is helping to facilitate the global transition to a greener economy by providing an insurance option to all types of energy companies, including both old and new projects.
New French legal framework an “unprecedented opportunity” for captives – Emma Sansom
French legislation passed at the end of 2022 is presenting an “unprecedented opportunity” for captives in Europe, according to Emma Sansom, Zurich’s group head of captives.
In a wide-ranging interview as guest co-host of GCP #81, Zurich’s new captive chief discussed her priorities for the new role, where she expected to see further innovation and the overall value proposition of captive insurance.
Sansom moved to Switzerland to take on the new role at the start of the year, having previously been Zurich’s head of captive services in the UK. Captive Intelligence reported today that Esme Gould will succeed Sansom in that role.
Discussing recent moves in Europe for new captive legislation, Sansom said developments in France were particularly promising.
“The recent legal framework that has been announced I think is actually an unprecedented opportunity in this space,” she said.
“You’ve got the French Treasury talking about captives providing support for systemic risks for their parents. We need to be getting in and engaging with the market and understanding what it is that Zurich can do to support their customers and their new potential customers in this space.
“There’s been conversations about potential repatriation, but actually I think there’s a huge opportunity for new formations as well.
“We can provide some support and insight into those conversations along with the likes of Aon, WTW and Marsh.”
Sansom also said she was keen to explore whether more group captive-type structures could become better utilised in Europe.
Zurich already works with group captives in the North American market and in January 2023 announced it had partnered with Innovative Captive Strategies (ICS) to launch a Cayman-domiciled group captive that will bring together companies wanting to optimise their risk management programmes and advance sustainable practices.
“Why it’s worked so well in the US is because you have quite a large market, which means that diversification across a group captive portfolio is quite easily achieved,” Sansom added.
“So I think we need to establish whether or not that’s possible in Europe. They also have dedicated distribution channels and therefore they have experience in management and marketing of these structures. So it is quite well defined and quite mature in the US.”
GCP #81: Zurich’s Emma Sansom and Megan Ogden of EIS Insurance Services
In episode 81 of the Global Captive Podcast, Richard is joined by guest co-host Emma Sansom, group head of captives at Zurich, who discusses her priorities in the new role, their view on D&O in captives and Zurich is supporting more cyber captive programmes.
There is also an interview with Megan Ogden, chief operating officer at Energy Insurance Services, a sponsored captive in South Carolina which provides cell facilities to members of Energy Insurance Mutual.
Both interviews reference a recent Long Read on Captive Intelligence about renewable energy companies and their interest in utilising captives. Read it here.
For more information on Zurich’s captive services, visit their Friend of the Podcast page here.