The Captive Insurance Companies Association's (CICA’s) annual market study has revealed that a quarter of participants will likely place medical stop loss coverage in their captive over the next three years—highlighting the uncertainty surrounding the implementation of the US Patient Protection and Affordable Care Act.
The survey was drafted and approved by a CICA committee and conducted by the independent consulting firm, Veris Consulting. A summary of the survey results was discussed at CICA's 2013 international conference in Palm Springs.
The majority of respondents represented single parent captives (63 percent), followed by segregated cell captives (17 percent), risk retention groups (13 percent), association captives (six percent) and agency captives (one percent).
Placing employee benefits coverage within captives was certainly a popular survey topic. Alongside stop loss, 20.6 percent of participants admitted they are likely to place accident and health coverage into their captives and 22.1 percent said that they might place disability benefits over the same period.
The study also highlighted the three biggest challenges in owning a captive according to participants.
Retention/growth/expanded utilisation accounted for 20.6 percent of responses; 17.6 percent of participants indicated regulatory issues; and 11.8 percent of participants said collateral.
“These challenges make perfect sense given the continued lackluster economy, the current myriad of international, federal and state regulatory issues, and the ongoing tight lending environment due to current monetary policy,” said a statement from CICA.
A growing number of survey participants also reported cyber liability as an additional coverage being placed in their captives. “Most likely because of a lack of availability in the commercial insurance market.”
