Somers Risk Consulting
Jeff Kehler of Somers Risk Consulting discusses the captive environment of South Carolina and how working in the private sector differs from the public sector
What is the current landscape of the captive insurance industry in South Carolina?
The current environment for captives in South Carolina could not be better. Working with captive director Jay Branum and deputy director Lee Hill, we have created a well-oiled captive machine.
It started with hiring well-educated employees dedicated to the captive division, then updating our legislation to state of the art, and lastly, executing.
With the focus thoroughly placed on timely responses, professionalism, client focus and building value, we forged a cohesive team of insurance professionals who understand the need for prudent regulation and the need to work with clients to maximise their investment in South Carolina.
The effectiveness of these measures is demonstrated in the steady growth of the domicile and the timely responses to what clients’ value most—licensing, business plan changes and ease of doing business. In these regards, South Carolina is second to none.
How does your new role in the private sector compare to the Department of Insurance?
The two are worlds apart. In the private sector it is all about accomplishment, while in government it is all about process. Fortunately, Branum, Hill and I all had experience in the private sector prior to joining the Department of Insurance, which allowed us to promote integration of the private sector mentality into a government position.
We always tried to keep the needs of the client foremost in our priorities and build their client value while balancing regulatory process and procedure. In the private sector, it is refreshingly free of small mindedness and ‘check the box’ mentality.
The challenges vary between the two: in government, you are above the daily fray of working with clients and only see the end result. At Somers Risk, we amp up the consulting and service efforts throughout the process to ensure clients gain the value they are looking for in their captive programme. Therefore, the private sector is set apart by the freedom to be creative and innovative, which is refreshing, challenging and invigorating.
As the first state to pass a cybersecurity bill, how significant a threat do you perceive cyber risk to be in South Carolina?
The Insurance Data Security Act was a model developed by the National Association of Insurance Commissioners over a number of years. It is very comprehensive and detailed. South Carolina took the lead in passing the act because insurance data often contains personally identifiable information (PII), which, if stolen, can compromise an individual’s right to privacy or the loss of their personal identity. This is a significant threat to the citizens of every state, large, small, and in-between.
While many insurance commissioners were willing to sit back and let the early adopters figure out how to administer the act, Ray Farmer, South Carolina director of insurance, felt the need was too great to wait for someone else. He took the bold step to work with the leaders of the legislature to get it passed and to work out the administrative details.
However, this was not in response to the cyber security environment in South Carolina alone; it was because cyber-attacks know no borders. A loss of PII in South Carolina, or any other state, can lead to widespread data loss elsewhere, which is why it was so important to take this first step.
What is your vision for the future of the captive industry in South Carolina?
South Carolina is in its twentieth year as a captive domicile, during which time it has had its ups and downs, and successes and failures. One thing that has prevailed is the philosophy of “do it right and do it right now”.
My vision is for South Carolina to be a sterling example of uncompromising professionalism in all aspects of the captive space. This includes the people working in the industry and its clients. It is easy to copy the latest and greatest innovation du jour, but this is short-sighted and can lead to disappointment.
South Carolina has never tried to impress the world with big numbers. It is about quality, not quantity. Therefore, South Carolina’s future will hold true to its past by never compromising on professionalism, honesty, integrity, and best business practices. This will keep the domicile growing and continue to provide the greatest of client value.
