Monday, April 6, 2026

Membership options

Home Blog Page 78

Legislative bill in works in response to current 831(b) proposals

Luke Harrison
-
0
Legislative bill in works in response to current 831(b) proposals

The MiniCap Coalition, which includes members such as the 831(b) Institute, is exploring introducing a legislative bill in response to current Internal Revenue Service (IRS) proposals regarding micro-captives.

Captive Intelligence reported in April 2023 that the IRS had proposed new regulations for “micro captives”, with some industry experts saying they could destroy the 831(b) sector.

The 831(b) Institute was launched in the US in June and immediately asked for clarity from the IRS around how it regulates captives that make the 831(b) tax election, arguing that it “unfairly” scrutinises them.

Instead of creating guidelines that allow for captive plans to be fairly regulated, the 831(b) Institute argued that the IRS is attempting to push forward harmful regulation that will make micro-captives less effective.

“We are working on developing legislative language and the idea is to get a bill drafted, and hopefully introduce companion bills in both the House and the Senate,” said Maggi Lazarus, attorney representing the Coalition.

“We’re not sure if there will be a legislative vehicle that could carry this kind of bill to enactment this year, but next year there will be a large tax bill debate necessitated by the expiration of a number of the individual provisions that were enacted in 2017.”

Lazarus said they have not drilled down on specific details yet, but the approach is to focus on a few key areas of concern.

She also said the Coalition is not under any illusion that they are going to resolve every problem with enforcement against captives with one piece of legislation.

“We’re looking at it as incremental progress in response to the IRS’s activities,” she said. “We’d like to try and position ourselves to be part of the mix of items that will be considered in that package.”

Lazarus said they pivoted to a new strategy based on advice from members of Congress which suggests the IRS is not willing to sit down with Congress and other stakeholders to find a fair path forward regarding current proposals.

GCP Short: Edgware Re, the cyber group captive

Richard Cutcher
-
0
GCP Short: Edgware Re, the cyber group captive
Ellen Charnley, Marsh Captive Solutions
Thomas Raegan, Marsh Specialty

In this GCP Short, produced in partnership with ⁠Marsh Captive Solutions⁠, Richard is joined by Ellen Charnley, president of Marsh Captive Solutions, and Tom Raegan, global head of cyber at Marsh Specialty, to discuss the genesis of Edgware Re, its new Bermuda-domiciled group captive for cyber.

Recorded at RISKWORLD in San Diego last week, Ellen and Tom share insight on how Edgware Re can fit into an insured’s broader insurance programme and continued evolution of captive deployment within cyber risk financing strategies.

For more information on Marsh Captive Solutions, visit its ⁠Friend of the Podcast page⁠.

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

Singapore licenced 5 additional captives in 2023

Luke Harrison
-
0
Singapore licenced 5 additional captives in 2023

Singapore licensed five new captives in 2023, while there were zero dissolutions, taking the total number of captives domiciled in the jurisdiction to 87.

All five new captives licenced in Singapore in 2023 were general insurers.

In total, there is one life captive insurer, five composite captive insurers, and 81 general captive insurers domiciled in Singapore.

Total gross written premiums for 2022 totalled $1.96bn. The 2023 figure will be available later in the year.

In September, Captive Intelligence published a long read highlighting that Singapore is experiencing “significant captive growth” from Asian parented companies, as the region sees an uptick in captive formations.

Guernsey trusted location for pension scheme longevity swaps

Luke Harrison
-
0

Guernsey is a popular European domicile for many UK defined benefit (DB) pension scheme longevity swaps, according to Christopher Anderson, partner at law firm, Carey Olsen.

A defined benefit (DB) pension scheme longevity swap is a financial transaction used by pension funds to manage the risk of increasing life expectancy among their beneficiaries.

Recent spikes in interest rates have resulted in large increases in the funding levels of many DB schemes, and many are considering a bulk annuity transaction or “buy-in”.

There have been 18 longevity swaps transacted in Guernsey to date and they each follow a similar structure whereby the pension scheme establishes a Guernsey-licensed special purpose vehicle insurance company (SPV).

During a longevity swap, the SPV insures the longevity exposure of the DB scheme to its members, and then reinsures those liabilities with a reinsurer. The SPV does not retain any net risk.

“The Guernsey SPV is thinly capitalised because the credit risk in relation to the transaction sits with either the life reinsurer or the pension fund,” Anderson told Captive Intelligence.

“If longevity departs significantly from the expectations, either the reinsurer or the pension trustee is going to be out of pocket and so margin calls on those movements can be high.”

Anderson said the Guernsey SPV is not sufficiently capitalised to provide these sums.

“The captive’s assets are primarily its rights against the reinsurer and the pension trustee, so given that the assets sit in either of those two entities, security and collateral is provided by those two entities so capital can flow directly between them rather than through the Guernsey captive.”

Anderson said Guernsey is a popular destination for these swaps as it has been a significant insurance hub for a long time and is a known quantity and a trusted jurisdiction.

“We’re located close to London where a lot of pension trustees are based, making it easier to attend board meetings,” he said. “Guernsey is not part of the UK and was never part of the EU, so it’s not within the Solvency II regime.”

The SPV vehicles in Guernsey are category six licenced insurers and so are subject to lighter touch regulation.

“The regulator here sees them as very low risk transactions because they are fully collateralised on either side and the counterparty is obviously a very significant institution or pension pot,” he explained.

Anderson said all such Guernsey transactions to date have been done through incorporated cell companies (ICCs), but it would be possible to transact through a cell of a protected cell companies (PCCs).

“The fact that these transactions can endure for 60 years has made people wary of protected cells, but an observable shift is happening, and people are becoming more comfortable with them,” he said.

Anderson said more jurisdictions have protected cells than ever before, “and I think the fact that the UK has them is a significant part of that”.

“Increased use of PCCs would facilitate further cost reduction and may mean that smaller pension funds start to use these structures more readily in the future,” he said.

AM Best upgrades rating of Signet Jewelers captive

Luke Harrison
-
0

AM Best has upgraded the long-term issuer credit rating to “bbb+” (good) from “bbb” (Good) and affirmed the financial strength rating of B++ (good) of Texas-domiciled Zale Indemnity Company (ZIC).

ZIC is a captive owned by Signet Jewelers, the world’s largest retailer of diamond jewellery, and provides third-party credit insurance and warranty cover to customers of its affiliated retailers.

Management has affirmed ZIC’s value to the organisation’s growth as ZIC provides a strategic alignment in offering CLIPs on extended warranty agreements in States that require them by law.

The operations for ZIC as a contractual liability insurance policy (CLIP) provider limits its underwriting risk, along with limited surplus growth.

The upgrade in ZIC’s operating performance to adequate from marginal is supported by management’s decision to retain its operations as a CLIP.

The outlook of the long-term ICR has been revised to stable from positive, while the outlook of the FSR is stable.

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

ZIC’s revenue comes from fee income associated with its CLIP business, which diminishes underwriting risk for the captive.

The upgrade is further supported by ZIC’s operating performance metrics as both the combined and operating ratios improved significantly over the most recent five-year period.

ZIC’s ratings reflect its solid level of risk-adjusted capitalisation, as measured by Best’s capital

adequacy ratio (BCAR), strong liquidity and the high credit quality of its investment portfolio.

Offsetting rating factors include a limited business profile and limited organic capital growth due to the small size and scope of its operations.

Adriana Scherzinger to be Zurich’s global captive leader

Richard Cutcher
-
0
Adriana Scherzinger to be Zurich’s global captive leader

Adriana Scherzinger will succeed Emma Sansom and take on the group head of captives position at Zurich Insurance, effective from 1 September.

Sansom was appointed to the position in January 2023, but departed last month.

Scherzinger, who is currently head of alternative risk solutions at Zurich North America, has a long history with captives at Zurich, including as head of captive services in Latin America and as a captive fronting manager in Europe.

Speaking to Captive Intelligence today at the RISKWORLD conference in San Diego, Scherzinger said: “I am very excited to go back to Switzerland and take on this group role for captives.

“Five years ago, it was natural for me to go back to Latin America and work there, before moving to Chicago in 2022 to learn about the captive market and work with our clients in the United States.

“It was important for me to come to America and learn about the market because of the growth and innovation we have here. There is healthy competition between domiciles in the United States, which I think is really beneficial, and there is the group captive aspect, which is different to Europe and the rest of the world.

“I am excited by the recent domicile growth in Europe and would like to explore if there are some of these US aspects, such as group captive and broader cell utilisation, that we can support and facilitate in other markets.

“Zurich has been in captives for 35 years. In terms of captive fronting and reinsurance, we are a big player globally.”

Scherzinger will relocate to Switzerland towards the end of the year and report to Vinicio Cellerini, global head of customer & distribution management for Commercial Insurance at Zurich.

Joshua Nyaberi, who has taken on the global captive role on an interim basis since Sansom’s departure, will continue until Scherzinger starts in the position on 1 September.

Zurich North America will be hosting its Captive Dialogue Day in Chicago on 25 June.

Property the fastest growing captive line for Marsh

Richard Cutcher
-
0
Property the fastest growing captive line for Marsh

Property is now the fastest growing line of insurance written by captives managed by Marsh, with 29% more captives under management insuring the volatile line compared to last year.

Speaking at the Marsh Captive Solutions Luncheon at RISKWORLD in San Deigo on 7 May, Americas captive consulting leader Michael Serricchio said clients are responding to the troubled commercial market.

“Property is the number one fastest growing coverage in our captives,” Serricchio said.

“Clients that are writing property are writing limits much higher than they were before, using quota shares and increasing retentions.”

While cyber, D&O and employee benefits all continue to feature prominently in the growth areas for captives, it was property that took the headlines in 2023 and it continues to be an area captives are stepping into.

Pat Donnelly, president of Marsh Specialty & Global Placement, opened the presentation by saying “fatigue” and “frustration” with the commercial market had led to the increased utilisation and innovation within captives.

Donnelly added that the captive manager’s portfolio now writes $73bn in aggregated premium and “frankly, I think we’re just getting started”.

The Marsh Captive Solutions team, led by its president Ellen Charnley, also discussed domicile trends, reinsurance placements, ReadyCell and the launch of Edgware Re, its new Bermuda group captive for cyber.

The poster child for domicile growth in 2023 was Canada with 78% premium growth in Marsh managed captives year-on-year, predominantly led by the emergence of Alberta as an new domicile.

Charnley said it was an “exciting time for Canadian captives, for sure”.

“We are doing a lot of work in Canada bringing captives there,” Serricchio added.

“Canada as a whole, including parent companies based there, are embracing the captive concept. They are tired of the commercial market and taking control of their programmes.  They are doing it in a smart and sensible way.”

Marsh has now formed more than 500 captives over the past four years, with 125 new captives formed in 2023. Including cells, it has 1,900 entities under management.

AstraZeneca captive introduces business resilience policy

Luke Harrison
-
0
AstraZeneca captive introduces business resilience policy

AstraZeneca has implemented a five year business resilience insurance policy that will help protect against supply chain disruption, reputational damage and product withdrawal.

The policy was designed and structured by AstraZeneca in partnership with Strategic Risk Solutions and is backed by three of the world’s largest reinsurers.

AstraZeneca is also part of the Russell Working Group, which has been developing ‘connected risk’ outcome-based solutions. Steed presented the final business resilience policy to the group.

The Russell Working Group was originally formed in 2018 to focus on ‘connected risk’ and to explore how data and analytics could help corporate risk managers and (re)insurers design risk solutions more suited to today’s environment.

The group has more than 30 members, including 20 of the FTSE100, representing companies of various sizes across industry and encompassing both insurance and risk professionals.

“It was a real privilege to witness history in the making of a new era for insurance with this tangible connected risk solution,” said Suki Basi, managing director of Russell.

“The insurance market has been perceived as being resistant to change but here is an example of the market leaders displaying true innovation.”

Initially, the “connected risk” concept offers risk financing against a range of major events, with minimal exclusions, but Russell said that as exposures become better understood and with improvements in data and analytics, there will be a major industry shift to risk transfer structures of this type.

“I was delighted to advise on the progress and success of the AstraZeneca Group Insurance team in implementing our exciting new business resilience insurance policy within the AstraZeneca captive and reinsurance framework,” said Kevin Steed, head of group insurance at AstraZeneca.

“The level of dialogue between the various risk managers on the Russell Working Group call was phenomenal, clearly outlining the common interest that insurance products need to be relevant, not just now, but also for the future.”

Steed was a guest on the Global Captive Podcast in 2021 when he discussed the growth and evolution of AstraZeneca’s Cayman-domiciled captive and how it utilises structured reinsurance programmes.

Cells still not wholly embraced by Europe, US domiciles increasingly attractive – Jelto Borgmann

Luke Harrison
-
0
Cells still not wholly embraced by Europe, US domiciles increasingly attractive – Jelto Borgmann

Companies in certain European countries are less likely to utilise cells than others, according to Jelto Borgmann, captive portfolio manager at HDI Global.

The use of cells in Europe has become more popular, but there is a lack of choice when it comes to domiciles within the European Union, as Malta is the only EU captive domicile that has PCC legislation in place.

More broadly in Europe, Guernsey, Gibraltar and the Isle of Man all facilitate cell business, with Guernsey a particularly popular option.

“I have a feeling that some countries are more reluctant to go in the cell direction than others,” Borgmann told Captive Intelligence.

“With UK companies, they are very open to cells, but a lot of German companies still have the issue.

“There are some that went in this direction, but it is still something that is not so familiar to everybody and needs a little bit of explanation.”

Borgmann said that from his perspective there is some legal uncertainty when it comes to cells writing direct insurance within the EU.

“In Malta they can directly write business in Europe, so they could also issue policies for compulsory insurance,” he said.

“My question would be if there would be a case, for example, when the captive defaults and there is not enough money in the cell and core to pay a claim for compulsory coverage it issued, I’m still not 100% sure that the ring fencing would be accepted by the German legal system, which is not familiar with any kind of ring fencing from my knowledge.”

Borgmann said he is seeing an increasing number of companies exploring the option of domiciling their captive in the United States.

“More and more European companies are looking into US domiciled captives, and that is something we have already seen,” he said.

Several States within the US have active cell legislation as they continue to rise in popularity.

Borgmann noted that EU companies are attracted to by the enhanced processes and accessibility of the regulators in the US compared to certain European jurisdictions.

“To take one example, four or five years ago, we had a German client who had questions regarding Vermont, and they messaged the regulator on LinkedIn and a day later they had a response, and that is something you don’t get in Germany.”

Flagstone International enters captive market

Richard Cutcher
-
0

Flagstone International has partnered with Strategic Risk Solutions to allow its European clients access to the cash deposit aggregator’s platform.

Flagstone’s platform allows trusts, funds, companies, and high net worth individuals to manage their cash deposits across multiple banks and jurisdictions using a single account.

The firm already makes its platform available through trust companies, private banks, wealth managers and family offices, but is now targeting captive insurance.

“Having made great strides within the trust space, we recognised similar issues were arising for managers of captive insurance structures – both standalone and cell structures – which made this a logical next step for Flagstone International,” said Damian Cocking, head of sales at Flagstone International.

“We are very excited to be launching into the captive space and we look forward to rolling out our platform to other leading firms in this area of the market in the not-too-distant future.”

Peter Child, CEO at SRS Europe, said:“SRS provides our clients with the most innovative options when it comes to using their captive to better their business.

“When Flagstone International first came to me with this idea I thought it was an interesting option to ensure our clients can continue to manage cash deposits with ease.”

1...777879...162Page 78 of 162

© 2025 Global Captive Media Ltd.