Friday, November 14, 2025

Membership options

Home Blog Page 51

AM Best affirms financial strength rating of Nissan captive

Luke Harrison
-
0

AM Best has affirmed the financial strength rating of A (excellent) and the long-term issuer credit rating of “a” (excellent) of Bermuda-domiciled Nissan Global Reinsurance (NGRe). The outlook for the ratings is stable.

NGRe is a captive owned by Japanese car manufacturer, Nissan Motor Co, providing Nissan with a number of insurance coverages in the US and abroad, including, but not limited to, extended service contracts, product liability and inland marine.

As a member of the Nissan family of companies, NGRe benefits from the group’s proprietary data warehouse, extensive risk management practices and loss control programmes.

While the company continues to generate strong annual earnings, the captive’s total surplus has declined over the past five years as its dividends returned to the parent have exceeded its earnings.

However, the company has ample liquidity with favourable cash flows for the captive’s selected risks and exposures.

AM Best expects there will not be changes in the parent’s willingness to support the captive even as it periodically returns excess capital to the parent.

The ratings reflect NGRe’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The balance sheet strength assessment is supported by NGRe’s level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level.

SCCIA donates $100,000 to create Captive Insurance Endowed Fund

Luke Harrison
-
0

The South Carolina Captive Insurance Association (SCCIA) has gifted $100,000 to the University of South Carolina’s Darla Moore School of Business to create the South Carolina Captive Insurance Endowed Fund.

The fund will provide support for undergraduate scholarships and graduate fellowships for Darla Moore School students, specifically for students who have expressed interest in pursuing a career in captive insurance in South Carolina.

It will give preference to students who have completed or are enrolled in risk management and insurance classes and those who have interned for a South Carolina Captive Insurance Association member organisation.

“The organisation is thrilled to have created this $100,000 endowment with the Darla Moore School of Business to help promote and sustain the captive insurance industry in the Palmetto State,” said SCCIA President, Warren Miller.

The hope is that the fund will help support the captive industry in South Carolina for decades to come and sustain a pool of professionals to support the industry, thus attracting more captives to domicile in the State.

“The South Carolina Captive Insurance Association is honoured to have partnered with the University of South Carolina’s Darla Moore School of Business on this $100,000 endowment,” said Annie Wilson, executive director of the SCCIA.

“We are anxious to see the fund’s impact on our industry and the next generation of captive professionals in our domicile.”

SCCIA scholarship recipients will also receive complimentary registration and access to the SCCIA’s

Annual Educational Conference, networking activities, and the SCCIA’s captive academy course.

GCP #109: Should captive boards have bespoke D&O cover?

Richard Cutcher
-
0
GCP #109: Should captive boards have bespoke D&O cover?
Nigel Brand, Spring Insure
Malcolm Cutts-Watson, Spring Insure

In episode 109 of the Global Captive Podcast, supported by the EY Global Captive Network, Richard visits the offices of Spring Insure in Guernsey.

Spring Insure is a managing general agent focused on the offshore financial centre market and specialising in D&O.

CEO Nigel Brand and board member Malcolm Cutts-Watson discuss the current attitude and approach towards D&O insurance by captive boards, and particularly in relation to independent non-executive directors (iNEDS).

To get the latest news, analysis and thought leadership on the global captive market, make sure you are visiting ⁠Captive Intelligence⁠ and signed up to our ⁠twice weekly newsletter⁠.

STICO Mutual expands risk appetite to attract new members

Luke Harrison
-
0
STICO Mutual expands risk appetite to attract new members

Due to STICO’s desire to expand, the mutual has continued to grow its risk appetite, according to Colin Donovan, president of STICO Mutual Insurance Company, RRG.

STICO is a Vermont-domiciled mutual captive focused on manufacturers, installers, and distributors of storage tanks, vessels and related products.

He said the mutual had since ventured into petroleum equipment contractors who do not manufacture anything, “they just do the installation work”.

“We ventured into pressure vessel manufacturers, which are a different kind of tank, ones that are under pressure, as opposed to being open to the atmosphere,” he told Captive Intelligence.

He highlighted that the captive’s latest area of growth has been food and beverage tank manufacturers.

“I think our future growth will come from pressure vessels in the food and beverage space, but the manufacturing process is very similar across the board, it’s just to which exact standard they’re building it to,” he said.

Donovan noted that there’s no strict red line when it comes to accepting new members to the mutual.

“If you’re involved with tanks, you can become a member,” he said. “However, there are certain qualities we look for in new members.”

Donovan said STICO values family-owned businesses where the business owners are actively involved in the day-to-day operations of the company.

“We know that in these types of companies, the quality of the product matters more to upper management because the owners are directly engaged,” he added. “That’s something we prioritise.”

Donovan said history is important to STICO, especially in terms of how companies have approached problems when they arise.

“Issues happen from time to time, and your product may have defects but it’s about how you, as the owner of a manufacturing company, address those issues and make things right with your customers,” he said.

“If your approach is, ‘that’s not my problem, here’s my insurance carrier’s number,’ then you’re not the type of insured we’re looking for.”

Instead, Donovan said the STICO wants to work collaboratively with its manufacturers to solve problems as they arise.

New VCIA Board approved with Gail Newman appointed chair

Luke Harrison
-
0

VCIA’s 2024 annual general meeting was held during the 39th VCIA conference, where voting members elected the new 2024-2025 VCIA Board.

The new board includes Julie Bordo, PCH Mutual Insurance Company, Joe Carter, United Educators, re-elected to a second term, Aaron Ciullo, Marsh Captive Solutions, Gail Newman, Bright Horizons, re-elected to a second term, and Brenda Stewart, of AIG Captive Solutions.

The outgoing VCIA Board also approved Newman as chair, Carter as vice chair, Jason Palmer as treasurer, and Melinda Young as secretary.

“My fellow board members have put a tremendous amount of trust in me, and it’s great inspiration to help lead VCIA to new heights,” said Gail Newman, vice president of risk management at Bright Horizons.

The VCIA staff and board said it would like to thank outgoing board members Andrew Baillie, Lawrence Cook and Derick White for their great work over the years.

“I have a deep appreciation for the essential role captives play in supporting their members,” said Carter, United Educators’ vice president of business development and UE Experience.

“Helping lead VCIA is an opportunity to serve a wide spectrum of self-insurers across the country.” 

The next VCIA board meeting, planned for October, will focus on incorporating stakeholder feedback and building out VCIA’s plan ahead of VCIA’s 40th anniversary in 2025.

Overfunded plans could lead to more US captive pension transactions

Richard Cutcher
-
0
Overfunded plans could lead to more US captive pension transactions

There have been more inquiries as to whether captives can be used to terminate or de-risk pensions plans in the United States, partly due to the current interest rate environment, according to Spring Consulting’s Karin Landry and Prabal Lakhanpal.

⁠Captive Intelligence reported in July⁠ that the US Department of Labor had tentatively authorised an ERISA exemption for the New York-based Memorial Sloan Kettering Cancer Centre (MSKCC), concerning a pension risk transfer to its Vermont-domiciled captive.

Spring Consulting Group worked closely with MSKCC on the application to the DoL and in the latest episode of the Global Captive Podcast, Spring’s Karin Landry and Prabal Lakhanpal discuss pension risk transfer to captives more broadly, how they work and whether we might see more activity in this area.

Explaining how the captive approach came about in the case of MSKCC, Landry explained: “We did an RFP, went to market and what we found was the market was charging substantially more to take the risk on because they were uncomfortable with the liability, the shape of the risk.

“We looked at utilising the captive, and because it’s an ERISA benefit, just as any other ERISA benefit funded in a pure captive, you had to go through a prohibited transaction exemption process, similar to any other process you’d go through for life or disability, structured in a similar way, fronted with an A rated carrier, ceded to the captive, and reinsurance on the back end.”

MSKCC already owns a mature pure captive in Vermont, so a separate cell was formed to keep the pension risk separate.

Concerning the broader landscape and motivations for US pensions plans, Lakhanpal said it can be viewed as similar to other lines recently seen going into captives.

“The way I think about captives in the pension transaction is similar to all the other lines where captives have been an extremely efficient tool for risk mitigation and creating an alternate program structure,” Lakhanpal said. “There is two plays to it.

“One is with the idea of leveraging a captive to take back control of underwriting risk and how you’re pricing for that risk. And then there’s the second aspect, which is having a better control on how investments are structured.

“A lot of pension plans in the US leverage illiquid investments as a core component of their investment portfolios.

“As you think about illiquid investments, a lot of pension plans are overfunded right now. To undertake a pension termination transaction, illiquid investments will need to be liquidated. 

“Doing so prior to maturity can be extremely inefficient and there’s a massive haircut attached to them.

“So, for organisations that are overfunded, are looking for a way to terminate the plan and have a fair amount of illiquid investments, leveraging a captive provides them a phenomenal alternative to going through with the commercial market.”

Lakhanpal added that there is a lot more interest compared to five years ago in exploring how a captive strategy could be deployed to support a pension plan termination or de-risking strategy.

“A lot of folks have been reaching out, trying to better understand how captives can help play a role in a pension transaction,” Lakhanpal added.

“It’s important to note that the exact programme structure, the exact policy structure, the exact captive structure will morph and evolve based on the fact patterns of each individual deal rather than copy paste an existing transaction.

“There’s a lot of nuance there and I think it’s important to work through all of those pieces, but certainly given how many pension plans are overfunded, the amount of folks out there that are sitting with actives on their pension plans, the amount of folks out there who have illiquid investments on their pension plans.

“I think we certainly are seeing a lot more interest than we did maybe five years ago. With the current interest rate environment, a lot of those pension plans are getting more aggressively overfunded than they were two years ago when interest rates were low. And I think that’s just starting to create a cycle of folks looking for potential ways to leverage a captive.”

Listen to the full episode with Spring Consulting’s Karin Landry and Prabal Lakhanpal here, or on any podcast app. Just search for ‘Global Captive Podcast’.

GCP Short: Captives and US pension risk transfer

Richard Cutcher
-
0
GCP Short: Captives and US pension risk transfer
Karin Landry, Spring Consulting
Prabal Lakhanpal, Spring Consulting

This GCP Short, produced in partnership with Spring Consulting Group, is all about a groundbreaking transaction of pension risk to a US captive.

⁠Captive Intelligence reported in July⁠ that the US Department of Labor had tentatively authorised an ERISA exemption for the New York-based Memorial Sloan Kettering Cancer Centre (MSKCC), concerning a pension risk transfer to its Vermont-domiciled captive.

The client, MSKCC, worked closely with ⁠Spring Consulting⁠ on this transaction and application to the DoL, and so Richard caught up with Spring’s Karin Landry and Prabal Lakhanpal to discuss pension risk transfer to captives more broadly, how they work and whether we might see more activity in this area.

For the latest news, analyis and thought leadership on the global captive captive market, visit ⁠Captive Intelligence⁠ and sign up to our ⁠twice weekly newsletter⁠.

Hawaii to allow dormant captives as HB234 passed

Luke Harrison
-
0

Hawaii Governor Josh Green signed HB234 into law this month, allowing certain captives to register as dormant in the jurisdiction.

A captive will now be able to apply to the Commissioner for a certificate of dormancy.

A certificate of dormancy shall be revoked if a dormant captive insurance company violates any of the provisions highlighted in the bill.

The certificate of dormancy shall be subject to renewal every five years and shall expire if not renewed by the captive owner.

An application for renewal must also not be submitted not less than ninety days before the certificate expiration date.

“The issuance of a certificate of dormancy shall automatically cause the certificate of authority of the captive insurance company to be placed in inactive status,” the bill states.

Risk Partners appoints Julia Schroeck and Cassie Bachman to captive team

Luke Harrison
-
0
Risk Partners appoints Julia Schroeck and Cassie Bachman to captive team

New Jersey-based Risk Partners has added to its ranks with the appointments of Julia Schroeck as manager of captive business development, and Cassie Bachman as manager of captive operations.

Risk Partners is an insurance specialty firm and is part of Holman Enterprises, a 100-year-old family business with an automotive focus.

“We are delighted to welcome Cassie and Julia to our team and to introduce them to our clients and prospects as we build a team of dedicated professionals to meet the evolving needs of the alternative risk market,” said Gary Osborne, VP of Risk Partners.

North Carolina-based Schroeck was previously with Hylant Global Captive Solutions before taking up her new role at Risk Partners.

Schroeck also previously worked for Strategic Risk Solutions from November 2016 to June 2022 in South Carolina, where she managed single parent captives, cell captives, group captives and risk retention groups (RRGs).

Bachman also has previous experience in the captive industry with Elevate Captives and has acted as chairperson of Self-Insurance Institute of America (SIIA)’s Future Leaders Committee.

Captive Insurance in Labuan IBFC – In a Class by Itself

Labuan IBFC
-
0
Captive Insurance in Labuan IBFC – In a Class by Itself

A risk management solution that offers infinite growth over time

Located off the Bornean coast in Malaysia, Labuan International Business and Financial Centre (Labuan IBFC) has emerged as a significant player in the global captive insurance industry.

Over the past three decades, Labuan IBFC developed a robust framework to attract captive insurance entities, contributing to its growth as Asia’s premier international financial hub for risk management solutions. Labuan IBFC remains an attractive financial intermediation hub with more than 800 licensed financial institutions operating currently.

Early beginnings and establishment of regulatory frameworks

Captive insurance was first introduced in Labuan IBFC in the early 1990s. Recognising the potential of captive insurance as a tool for risk management, the regulator, Labuan Financial Services Authority (Labuan FSA) introduced incentives to attract global businesses. The early days saw the establishment of a few captive insurance businesses, primarily from Asia, seeking a favourable regulatory environment and cost-effective solutions.

This was followed by introduction of Labuan IBFC’s regulatory framework which has been a cornerstone of its success in attracting captive insurance entities.

Likewise, the introduction of the Labuan Financial Services and Securities Act (LFSSA) in 2010 marked a significant milestone, providing a comprehensive legal framework for captive insurance activities including the introduction of the protected cell company structure.

This act lays down clear guidelines for the establishment, operation, and supervision of captive insurance businesses.

Collaboration between jurisdiction and key stakeholders

The jurisdiction’s central location in Southeast Asia, and its proximity to major markets such as China and Japan, designates Labuan IBFC as the ideal hub for regional and multinational businesses seeking efficient risk management solutions.

The jurisdiction’s flexible, business-friendly regulatory framework meets international standards and best practices, such as those set by the International Association of Insurance Supervisors (IAIS).

This streamlined reporting, coupled with features such as a risk-based regulatory approach low capital requirements and attractive and competitive tax incentives has led to a steady increase in the number of captive insurance businesses in Labuan.

This also grants convenient business flexibility and secures confidence for business owners to establish Labuan captive setups.

Furthermore, collaborating with industry associations such as the Labuan International Insurance Association (LIIA), the largest industry grouping comprising more than 200 insurance companies, as well as insurance and underwriting managers service providers and Labuan Trust Companies (LTCs) helps captive insurance businesses navigate the regulatory landscape and creates a supportive ecosystem.

These partnerships facilitate knowledge sharing, professional development, and the adoption of best practices.

Headline numbers and accolades

Labuan IBFC offers various types of captives, including pure captives, group/association captives, multiple captives, master rent-a-captives, and protected cell companies (PCCs) catering to diverse business needs.

The Labuan captive segment has been riding on an outstanding growth track by capturing Asia’s growing demand for a cost-efficient, alternative risk management solution. This is evident from the 9.4% growth in captive premiums since 2019.

As the region’s fastest-growing captive hub, as of 2023, it is home to 69 captives, and the segment has recorded a total premium volume of USD626.6 million, comprising more than 30% of the overall Labuan insurance industry’s premiums.

For a jurisdiction that began its self-insurance journey leveraging on self-insuring the risk of Malaysian-based corporates, the fact that most captive premiums now originate from overseas markets underscores how Labuan IBFC has become the hub of choice for captives. Accolades garnered by Labuan IBFC as a testament to this include:

•          the Highly Commended International Domicile award at the European Captive Review Awards 2022 and 2023,

•          the Best Asian Domicile award at the Asia Captive Review Awards 2021, and

•          the Top International Captive Domicile award at the European Captive Review Awards 2021.

Staying ahead of the curve

A significant milestone in terms of innovation for the Labuan captive industry is Labuan FSA’s issuance of the revised Guidelines on Captive Insurance Business, which was effective 1 January 2024.

The revised guidelines included provisions for the expansion of insurable risks of Labuan captives to include indirect insurable interest risks. Significantly, there was also the introduction of a new rental captive structure – External Rent-A-Captive.

The revision also included new structures for rental captives and streamlined procedures for the establishment of new cells under PCCs.

ACC 2024 – The captive event of the year

Labuan IBFC’s highly anticipated flagship event, the Asian Captive Conference (ACC) will be returning for its seventh year on 19th September 2024, at Sime Darby Convention Centre.

The ACC 2024 is expected to deliver an even more insightful conference taking into account the evolving needs of the APAC region’s captive segment with this year’s curated theme Asian Anchors: Leading the way in captive innovation.

The theme addresses the evolving needs of the captive insurance industry in the APAC region by promoting technological advancement, regulatory adaptation, risk diversification, market growth, sustainability, and customer-centric approaches.

By focusing on these areas, the conference aims to equip industry professionals with the knowledge and tools necessary to navigate the dynamic landscape and drive growth and innovation in the region.

The way ahead

Labuan IBFC has continued to innovate and adapt to the evolving needs of the captive insurance market. The introduction of digital insurance and insurtech solutions have opened new avenues for captive insurance businesses, enabling them to leverage technology for enhanced efficiency and customer experience.

Additionally, Labuan IBFC as an international business and financial centre has strengthened its focus on Environmental, Social, and Governance (ESG) principles. This focused has also spilled over into the jurisdiction’s captive segment, whereby key players are increasingly adopting ESG practices, thus aligning their operations with global sustainability goals.

1...505152...146Page 51 of 146

© 2025 Global Captive Media Ltd.