What is the current climate of Vermont's captive insurance market?
The current climate for captive insurance in Vermont is strong. Even before the pandemic emerged, the hardening insurance market produced a spike in interest in captive insurance companies toward the end of last year and into this year. While the pandemic obviously put a lot of discussions on pause as organisations scrambled to deal with the situation, the fact that Vermont saw a marked increase in captives being formed in the beginning of the year shows that enterprises of all stripes are looking at ways to gain more control over their risks in these uncertain times.
What has the Vermont Captive Insurance Association (VCIA) been working on so far this year?
Early in the year, we had already begun to put into motion the programmes for our annual captive conference held in August. With the pandemic coming onshore in late winter, we made the decision to go 100 percent virtual for the conference – and as hard as it was to decide not to hold the conference in person, I think in hindsight it was absolutely the right move.
Moving into this new environment has taken a lot of our time and energy here at VCIA, but not at the expense of our mission: to provide members with legislative leadership, education, opportunities for information-sharing and a network of mutual support with others who share objectives in order to ensure an environment favourable to the continued growth and health of the captive industry and the Vermont captive community.
How challenging has the COVID-19 pandemic been for VCIA?
Moving staff to a work-at-home model went relatively smoothly. Luckily, we are all quite mobile with laptops and cell phones. As with every organisation going through this, it took a little while getting used to working from my kitchen table daily, as well as all that video conference calling! ?
After putting on a live conference for the past 35 years the hard part for staff was learning how to build a virtual conference while continuing to marshal all the content we provide the industry. The company we chose for the 2020 conference platform has made the transition as straightforward as one can hope for. However, the playbook we used to put on our successful conferences had to be rewritten as we went along. We are very excited to be able to present the type of educational and even networking experiences the captive industry comes to expect with this new platform.
What other challenges has the state's captive industry faced?
The State of Vermont has had to pivot quickly to provide the same robust regulation and guidance to the Vermont captive insurance it is known for. It has done so without missing a beat. There have been no major delays or disruptions with licensing or regulatory issues as the Department of Financial regulation flipped to a work-at-home model back in early spring.
The captive insurance industry still faces many of the same threats it did before the rise of COVID-19. Pressure brought on by a mix of ignorance regarding captives by other state regulators (and in some federal corridors) along with a growing need for states to find revenue will exasperate the situation for the captive industry for some time.
One hopeful sign was at the National Association of Insurance Commissioners. The NAIC’s Risk Retention Group task force took several actions to resolve problems RRGs have been having when they register in non-domiciliary states. Overall, the goal was to encourage more communication between domiciliary and non-domiciliary states. Under the leadership of Vermont’s Director of Captive Insurance, Sandy Bigglestone, and with VCIA support and input, the Task Force adopted the revised Q&As, Best Practices, and the Uniform RRG Registration Form.
Have you seen an increase in interest around captives because of the ongoing COVID-19 pandemic?
As I mentioned earlier, there definitely has been an increase in interest. Not only has the State of Vermont already licensed more captives this first quarter than they have in a while, speaking to our members across the board I have been told about the surge in interest at all levels. Captive insurance solutions thrive when there are serious shifts in the risk environment – its what they were made for. We saw that after 9-11 most recently. The pandemic presents many, many challenges to all of us and we will be learning lessons regarding the best ways to mitigate such risks for months to come. But there is no other industry better prepared to learn and adopt new risk strategies to help businesses and society handle such events then ours.
You will be hosting the first virtual conference in the captive industry - how will this work and what can people expect from the event?
When we made the decision to go virtual we decided we needed to do it with the most robust 3D digital platform we could find in order to provide our attendees as much of the look and feel of being at our conference as we can.
Upon entering VCIA Virtual, attendees can access education sessions and forums in the theatre, meet virtually with exhibitors in the exhibit pavilion and engage in live discussion with other attendees via the captive lounge. Our resource centre provides materials from the educational sessions, captive press, and more. And just like an actual event, the virtual event has a dedicated help desk to answer any questions you may have and direct you to where you need to go.
As always, VCIA offers the highest quality captive insurance education, including panellists who are captive owners from some of the most prestigious organisations in the world. Attendees will learn from the best and brightest. The conference will span three days, and it will be possible for participants to attend more sessions than ever before. There will be the ‘live’ concurrent sessions you choose, as well as the opportunity to stream alternative sessions at a time convenient for you. Attendees can choose to step in and out of the conference throughout the three days. They will be able to ask panellists questions in real-time or save correspondence for a later occasion after the conference.
Because all sessions will be readily accessible, attendees can gain more professional education credits than at an in-person event. CPE, Vermont CLE and CRE credits are available to those who participate in the virtual conference webcasts. Attendees may earn up to 10 credits attending the three-day live event, and an additional 11 credits are possible attending the repeat sessions on 14 and 15 August.
A virtual exhibit hall means that attendees literally have exhibitors at their fingertips. Attendees can navigate the floor, access exhibitors’ materials, and make introductions (via a live chat function) in a more time-efficient manner. The energy and visual appeal of a live expo hall will be represented virtually, and exhibitors will have a chance to shine.
Face-to-face meetings, luncheons and happy hours are not the only way for attendees to meet new people or continue building relationships. Participants will be able to have meaningful discussions with other attendees and speakers at our captive lounge, either as part of a group or in private, using the lounge chat function.
Whether within the realm of the captive lounge, exhibit hall, during session Q&As, or through additional open forums, people will be able to easily access their peers and get connected to potential business partners.
By eliminating the time, expense, inconvenience, and the current potential danger of travel, going virtual makes the conference more accessible to a larger swath of people.
What are you most looking forward to about the event?
At the risk of looking like I am picking out favourites (which I am not!) here are a few that I think will be very interesting. ‘Using Your Captive to Protect Your Balance Sheet’ is very timely as every organisation is coping with the stress induced by the pandemic. Another session that is forward thinking is ‘Digital Transformation and Opportunities: What the Captive Market Will Look Like in 2025’.
Completing the first day of the virtual conference will be an insightful keynote address from economist Dr. Robert Hartwig, clinical associate professor of finance and director of the Risk and Uncertainty Management Center in the Darla Moore School of Business at the University of South Carolina, who will speak on the current state of affairs, and the transitioning insurance market, incorporating themes that will resonate through the rest of the conference, such as the impact of the pandemic on the industry.
‘Cloud Security and National Association of Insurance Commissioners (NAIC) Data Model Security Law’ will educate attendees on what the new security requirements are, educate on what cloud security is, and answer questions on the steps you need to take to be a modern, secure, and legally compliant captive. Our own captive insurance thespian troupe will ‘perform’ a dramedy that explores the reactions, interactions, strategies, and machinations that are all set into motion when a captive or risk retention group (RRG) has significant adverse development in our session ‘Crisis Management - A Case Study Dramedy’.
To top it all off, our final event at the conference is a panel with Dave Provost, Vermont’s Deputy Insurance Commissioner, and our other highly experienced panellists, for an engaging and interactive discussion on current hot topics impacting the captive insurance industry.
VCIA Virtual will be a great opportunity for the captive world to meet up, socialise, learn, earn professional education credits, hear great keynotes, and have fun in this time of uncertainty and isolation. We are very excited to present an excellent experience for the captive industry, and have people leave at the end knowing their time was very well spent!
What plans do VCIA have for the next 12 months?
VCIA will look to analyse what worked well and what didn’t work quite as well from the virtual conference experience. We will take that experience into our world-class webinars and events throughout the coming year. We are already planning webinars on speaking the insurance language, group medical stop loss, and our always informative captive taxation. Added in there is the ever-popular state of the union for captives with Vermont’s Dave Provost.
We will also continue with the other parts of our mission, including being one the primary advocates for the captive insurance industry in the US With over three decades of effective legislative results, VCIA has been successful in providing continual modifications to Vermont’s captive statutes, as well as fighting for the interest of the industry in Washington and at the NAIC. Our advocacy efforts ensure that the voice and interests of our membership are heard.
And finally, we will be listening to our members. 2020 has been an extremely challenging year for everyone. Huge shifts in the economy due to the pandemic followed by the sheer uncertainty of what is to follow means we, as a member organisation, need to be asking our members what we can do for them – things like specific educational needs and changes to captive statutes to accommodate the needs of our members are certainly on mind. And finally, what changes does VCIA have to make to match this new reality.
We are very hopeful that the industry can meet again in person on the shores of Lake Champlain in Burlington, Vermont, next summer. However, we with the experience we will gain from this year’s conference, VCIA will be ready for whatever comes ou
