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Premium skyrockets in Alberta as province licences 15 new captives

Luke Harrison
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Premium skyrockets in Alberta as province licences 15 new captives

The Alberta Department of Insurance licensed 15 new captives in 2023, with captive premium rising to C$54m (US$40m), compared to C$2.1m (US$1.6m) in 2022.

Alberta’s year-end total was 16, compared to one at the end of 2022, with the Energy Province introducing its captive legislation in July of that year.

Of the 15 new captives licensed in Alberta in 2023, 13 are single parent captives, one is a group or association captive, and one is an industrial insured.

Of the 16 year-end total, 14 are single parent captives, one is a group or association captive, and one is an industrial insured.

Alberta’s total gross written premium for its captives for 2023 was C$54m (US$40m), compared to C$2.1m (US$1.6m) in 2022.

Captive intelligence published an article in December highlighting that a large number of prospective captive owners are expected to pick the domicile over the more traditional offshore domiciles, which have historically been popular with Canadian businesses.

In episode 97 of the Global Captive Podcast, Rick Da Costa, partner and national leader for corporate and regulatory insurance & reinsurance at Borden Ladner Gervais LLP, discussed Alberta’s appeal as a new captive domicile for Canadian businesses.

GCP #100: Sandy Bigglestone, Heather McClure and Dan Towle

Richard Cutcher
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GCP #100: Sandy Bigglestone, Heather McClure and Dan Towle
Sandy Bigglestone, State of Vermont
Heather McClure, Helio Risk
Dan Towle, CICA

In episode 100 of the Global Captive Podcast, supported by the ⁠EY Global Captive Network⁠, Richard brings the first instalment of interviews recorded at the CICA International Conference that took place in Scottsdale, Arizona from March 10-12.

02.16 – 17.12: Sandy Bigglestone, Vermont’s deputy commissioner for captive insurance, discusses the latest captive activity in the State, how 2024 has started and the proposed changes to Vermont’s captive legislation.

17.55 – 27.31: Heather McClure, general counsel and chief risk officer at Helio Risk, tells us why Helio was launched, how it is working with brokers on captive education and her broader thoughts on development of the captive industry.

28.05 – 40.35: CICA president Dan Towle provides his take on the conference, the highlights and other developments at the Association.

For the latest news, thought leadership and analysis of the global captive insurance market, visit ⁠⁠Captive Intelligence⁠⁠ and sign up to the twice-weekly ⁠⁠Captive Intelligence newsletter⁠⁠.

US Treasury issues latest TRIA data call for participating insurers

Luke Harrison
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US Treasury issues latest TRIA data call for participating insurers

Insurers that participate in the Terrorism Risk Insurance Program (TRIP), including captives, have been asked to submit information for the 2024 TRIP data call, which covers the reporting period from 1 January, 2023 to 31 December, 2023.

The Terrorism Risk Insurance Act (TRIA) was originally signed into law by President George W Bush in November 2002, and acts as a federal “backstop” for insurance claims related to acts of terrorism.

It is currently reauthorised through to 2027 and has been a catalyst for increasing numbers of US-domiciled captives to provide terrorism related coverage to their parent groups.

Participating insurers are required to register and report information in a series of forms approved by the Office of Management and Budget (OMB).

All insurers writing commercial property and casualty insurance in lines subject to TRIP, subject to certain exceptions, must respond to the data call no later than 15 May, 2024.

The data call relies on four joint reporting templates, to be completed by small insurers, non-small insurers, captive insurers, and alien surplus lines insurers.

For the 2024 TRIP Data Call, an insurer will qualify as a small insurer if it had both 2022 policyholder surplus of less than $1bn and 2022 direct earned premiums in TRIP-eligible lines of insurance of less than $1bn.

Of this group, small insurers with TRIP-eligible direct earned premiums of less than $10m in 2023 will be exempt from the 2024 TRIP data call, however this exemption is not eligible for captives.

Captive Insurers are defined as insurers licensed under the captive insurance laws or regulations of any state.

Captive insurers that wrote policies in TRIP-eligible lines of insurance during the stated reporting period are required to register and submit data to the Treasury, unless they did not provide any terrorism cover.

Christopher Rizek joins Holland & Knight as partner

Luke Harrison
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Christopher Rizek joins Holland & Knight as partner

Christopher Rizek has joined law firm Holland & Knight’s Tax, Executive Compensation and Benefits Practice as a partner and will be based in Washington DC.

Rizek represents taxpayers in all types of federal civil and criminal tax controversy cases, including captive cases.

He supports clients through Internal Revenue Service (IRS) audits, prepares administrative claims, and protests of IRS actions, and litigates tax and tax-related cases in US District and Appellate courts, the US Court of Federal Claims, and the US Tax Court.

Additionally, he has represented taxpayers, financial entities, and professional firms in connection with IRS examinations of tax shelters and related compliance and professional ethics issues.

Rizek will also be a key member of the firm’s nationwide tax controversy team.

“Chris has an excellent reputation and remarkable skills in handling issues that are high enforcement areas for the IRS, including captive insurance cases and employee retention tax credits,” said Todd Keator, co-leader of Holland & Knight’s Tax, Executive Compensation & Benefits Practice.

“Many members of the firm’s tax controversy team have worked with Chris throughout the years, so we have first-hand knowledge of his deep understanding of tax law which will greatly benefit the growth of the team and its nationwide reputation.”

Before joining Holland & Knight, Rizek was a member at Caplin & Drysdale.

Rizek was previously an attorney-advisor and associate tax legislative counsel with the US Treasury Department, Office of Tax Legislative Counsel, with responsibilities for legislation and regulatory actions.

“I’m excited to join Holland & Knight’s highly regarded tax controversy team, as they are known for handling some of the most significant cases being heard by courts today,” said Rizek.

“I look forward to using my experience with IRS examinations and other tax controversy matters to guide Holland & Knight clients as the IRS continues its aggressive approach to enforcement.”

Captive Essentials training course launched in London

Richard Cutcher
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Captive Essentials training course launched in London

Captive Intelligence has partnered with RISCS CWC to launch a two-day educational training course for professionals new to the captive insurance industry or keen to join.

The first Captive Essentials course will be held on 22nd – 23rd May at etc.venues Fenchurch Street, teaching delegates everything they need to know about why captives exist, how they are formed and managed, and the broader role they play in risk financing programmes.

Drawing on experts from across the captive industry and covering topics from captive management, domiciles and investments, to fronting, reinsurance and governance, Captive Essentials is the ideal one-stop shop for everything you need to know about captive insurance.

On Day Two of the course, delegates will have the opportunity to apply all the knowledge gained by working in teams on an extensive captive case study exercise.

“Captive insurance has never been more relevant and as we see new domiciles emerging, particularly here in London at Lloyd’s and a prospective UK captive regime, it has never been more important to provide high quality education and training,” said Richard Cutcher, founder of Captive Intelligence.

Oliver Schofield, managing partner at RISCS CWC, said he believed the course should be ideal for anyone with a growing interest in captives or for companies keen to enter or expand their presence in the fast-growing sector.

“We see new companies entering the captive industry every week,” he said. “Whether that is (re)insurers and fronting partners keen to work with captives, MGAs utilising a captive structure or new captive owners and captive managers.

“Captive Essentials has been designed to ensure delegates leave with a strong grounding in how captives work and why they are increasingly valuable to corporates and the wider commercial market.”

The first Captive Essentials course will be held in London on 22nd and 23rd May with other dates and venues to be announced later this year. 

Captive Essentials costs £1,750 per delegate with group discounts available for bookings of three of more delegates from the same organisation.

The course fee includes all educational sessions, case study exercise, lunch on both days, coffee and refreshments, drinks reception and an optional delegate dinner on 22nd May.

For more information on the course agenda and timings, download the Captive Essentials brochure here. You can sign up to express your interest here, or email Richard.

Nevada expecting 50 dissolved captives to re-form if IRS backs down

Luke Harrison
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Nevada expecting 50 dissolved captives to re-form if IRS backs down

Nevada’s deputy insurance commissioner believes that if the Internal Revenue Service backtracks on proposed regulatory changes for 831(b) captives, around 50 of the 62 captives that were dissolved in the State last year will look to relaunch in the future.

Captive Intelligence reported in April 2023 that the IRS had put forward major changes to the way captives making the 831(b) are treated, including deeming some as “listed transactions” and labelling others as “transactions of interest”.

The proposed changes, which were the subject of a public hearing in August and divided opinion amongst some industry experts, have even prompted intervention from US Congress members in support of the 831(b) tax election for small captives.

Nevada licensed seven new captives in 2023, while 62 surrendered their licence, taking the total number of captives in the domicile to 100.

“With the assumption that it does not get adopted, they would certainly look into potentially re-forming their captives,” Nick Stosic, Nevada’s deputy insurance commissioner, told Captive Intelligence.

Stosic said the potential of being treated as a tax shelter led to these captives making the decision to close.

“It was something where even though it has not been adopted yet, they just wanted to get ahead of it,” he said. “I would say that we know 50 of those dissolutions were absolutely due to that.

“It was all reacting to the proposed 831(b) IRS rule, and they just felt more comfortable starting the year not having active captives. Unfortunately, we got hit with one shot with that.”

The State’s insurance commissioner Scott Kipper previously told Captive Intelligence Nevada was “awfully bullish” on the future of captives in the domicile.

Stosic said Nevada is expecting to launch a significant number of cells this year that will be focused on writing crop insurance.

“That’s something that we’re anticipating seeing more of this year,” he added.

He noted that sponsored captives have been the most active in terms of trying to form additional new cells in Nevada.

“We’re still continuing to see some of those sponsored captives come in with ideas for new cells,” he said.

“In terms of individual captives, I’d say we’re going to continue to try and be out there and promote Nevada, and we still think Nevada has got some incredibly positive assets that make it a great place to have a captive.”

Nevada’s legislature meets for 120 days every two years, and during this period captive regulatory changes will be proposed, with the next meeting starting February 2025.

“At this point we are starting to put together some potential topics to be in our bill for the next session, but we don’t have anything finalised,” Stosic said.

Kipper said they have already had good internal discussions about items that they may want the legislature to consider, “but I think it’s still early in the game”.

GCP Live @ CICA 2024

Richard Cutcher
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Nick Hentges, Captive Resources
Anjanette Fowler, PNC Institutional Asset Management
Steve Bauman, AXA XL
Matt Takamine, Brown & Brown
Melissa Hollingsworth, Atlanta Housing
Claire Richardson, Hylant
TJ Scherer, Spring Consulting Group

The Global Captive Podcast, supported by the EY Global Captive Network, is live in Scottsdale, Arizona as the final session of the ⁠CICA International Conference⁠.

This episode, featuring fun and informal captive chat and trivia, was recorded in front of a live audience on Tuesday, 12 March.

Our guests are:

Claire Richardson, of Hylant Global Captive Solutions

TJ Scherer, Spring Consulting Group

Melissa Hollingsworth, Atlanta Housing

Steven Bauman, AXA XL

Anjanette Fowler, PNC Institutional Asset Management

Matt Takamine, Brown & Brown

Nick Hentges, Captive Resources

For the latest news, thought leadership and analysis of the global captive insurance market, visit ⁠Captive Intelligence⁠ and sign up to the twice-weekly ⁠Captive Intelligence newsletter⁠.

Captive Intelligence Market Mixer – London

Richard Cutcher
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Captive Intelligence Market Mixer – London

Casual networking event for captive insurance professionals in the London market or just passing through, hosted by Captive Intelligence and supported by MAXIS Global Benefits Network.

Date: Wednesday, 24 April from 5pm

Venue: The Vault at Revolution Leadenhall, 140-144 Leadenhall St, London, EC3V 4QT. Directions here.

Join your fellow captive professionals at our latest Captive Mixer for the London market. A great meeting place for anyone working with or in captive insurance. It is free to attend and you are guaranteed to meet valuable new captive contacts and reconnect with existing ones as captives continue to boom.

To join us on 24 April, sign up below or here.

Thank you to our sponsors MAXIS Global Benefits Network for supporting our next Captive Intelligence Market Mixer.

Delaware aiming to licence new captives within 30 days

Luke Harrison
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The Delaware Captive Bureau is aiming to speed up its licencing process with the aim of licencing new captives within 30 days.

“The Captives Bureau now has a goal now of approving new applications for licencing within 30 days if complete, or at a later date if it’s a complicated application,” Mike Teichmann, director at Delaware law firm Parkowski, Guerke, & Swayze and president of the Delaware Captive Insurance Association, told Captive Intelligence.

“This applies both to conditional and non-conditional licences.”

For a conditional licence, if it’s filed before 1 November, the Bureau is aiming for a 30-day process.

“But because most of these come in towards the end of the year, if it’s filed after 1 November, we agree that an 80-day goal would be acceptable,” Teichmann added.

Teichmann told Captive Intelligence that the Association reached out to Stephen Taylor, captive director at the Delaware Department of Insurance, around this time last year because he had been talking about the idea of making improvements to the domicile.

“We sat down and we met with him and his staff over a period of about six months, to work out some improvements,” he said. “We finalised these improvements in October.”

The Bureau has also agreed to process routine requests such as approvals for dividends, or investment policy statement changes, in a ten-day period.

Taylor has also agreed to review and approve such requests before a board meeting is convened to adopt the proposed action. 

Teichmann said there is a real desire on the part of the Department to licence new entities, including certain 831(b)s, but there is greater focus on larger captives.

“831(b)s remain a sizable portion of the Department’s stable of about 700 licenced entities, and the Department doesn’t want to scare new 831(b)s off by any means, but they want to bring in some larger captives too,” Teichmann said.

“As an example, I’m working with an insurance company that’s creating an internal reinsurance mechanism using a Delaware captive and the Department has worked with us very speedily and competently to get this licenced.”

The Department licensed 43 new risk bearing entities in 2023, including cells and series captives, compared to 60 in 2022, with Delaware’s year-end totalling 670 risk bearing entities.

Montana licences 14 captives, 39 cells and series

Luke Harrison
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Montana licensed 12 pure captives and two protected cell companies during 2023, plus 37 series business units and two protected cells.

In total, the State had 108 active captives at 31 December, 2023 composed of 84 pure captives, 14 protected cell companies and seven risk retention groups (RRGs).

In addition, it has 154 individual cells and series business units.

Of the 51 new captives licensed in Montana in 2023, 12 are single parent captives, 2 are protected / sponsored cell captives, and 37 are series captives.

There were 24 captive dissolutions in 2023 compared to 18 in 2022.

Montana’s total gross written premium (GWP) for 2022 was $395m, with $118m coming from direct premium and $277m from reinsurance premium.

The 2023 premium will be available later in the year.

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