North Carolina Department of Insurance
Debbie Walker of NCDOI explains why ongoing regulation of licensed captive insurance companies is the domicile’s primary focus
Earlier this year, it was reported that North Carolina was planning a captive amendment, known as HB 220, are there any updates on this? What opportunities will the amendments provide?
The North Carolina general assembly had a significant amount of insurance legislation to consider during this year’s legislative session. It was determined that the timing of the captive insurance legislative proposal was not the best and would instead be proposed later. The North Carolina Department of Insurance (NCDOI) has begun its internal evaluation of the legislative amendments, including captive insurance proposals, that should be considered during the short legislative session in 2020.
Recent programmes have been created to draw in more women and to also attract young people into the captive sector, what is North Carolina doing to target more young people and women to work in the captive sector?
It has been a challenge to attract and retain young professionals (as well as applicants of any age) because of the favourable job market for those with an accounting education and work background, which is required for the analysts in our division. This market is providing career choices for young insurance and accounting professionals, and many young people are not aware of the interesting careers available in the insurance industry. We do desire to bring more young people into the NCDOI to become our future leaders. During the past three years under the guidance of Dr Michelle Osborne, chief deputy commissioner, the NCDOI has annually invited students and their professors from various colleges and universities to visit with us and learn about the NCDOI’s responsibilities.
Additionally, we speak at colleges and universities, whenever possible, to share information about the captive insurance sector of the industry with students. This summer, our division was fortunate to hire a college intern to assist our team. It was a great experience for the division and this opportunity also expanded the intern’s interest in a future career in captive insurance. Finally, we plan to advertise our available positions more frequently on the websites of various colleges and universities. We continue to encourage younger professionals to consider careers with the NCDOI.
It has been challenging, but our division has been fortunate to recruit some very talented young people, who possess not only the required accounting education, but also excellent communication skills, knowledge of technology, the ability to work with a team, and excitement about their jobs. These young people bring new ideas, perspectives and approaches to the work we do.
The NCDOI has been successful in attracting and retaining women to positions throughout the NCDOI. Women comprise 70 percent of the employees in our division. Additionally, the NCDOI has numerous women in leadership positions such as chief deputy commissioner, senior deputy commissioner, and deputy commissioner. I believe this is due to the job stability and work/life balance that is offered by the NCDOI, which is appealing to many women as well as men.
What do you see as the biggest challenges over the next year?
I believe the captive industry has a favourable outlook and it will continue to grow as more business owners learn about the benefits of utilising captive insurance to manage their risks. However, some of the challenges to the industry include regulatory and judicial activities such as the procurement taxation of captive insurers by non-domiciliary states and the Internal Revenue Service (IRS) scrutiny and reporting requirements accompanied by the outcome of several recent court decisions related to captive insurers.
In some cases, these activities have had an impact on business owners’ appetite for captive insurance. As discussed already, another challenge is the recruitment, training and retention of young professionals to replace those in the industry that will be retiring in the coming years.
With the rising “mass shootings” in the US, do you have any plans to create a non-profit captive in North Carolina to help victims/family members of mass shootings?
The rash of recent mass shootings in the US has been alarming and the impact on the victims, their families, and organisations where the violence occurs are devastating.
Although I am not aware of any plans for the state of North Carolina to utilise insurance to help victims and their family members, organisations may consider obtaining coverage for an active shooter, workplace violence, and similar types of risks through captive insurance.
A captive insurer provides the insured(s) with the ability to obtain the exact coverage, including gap coverage, and policy terms that are needed so that the insured may appropriately address the risks that it faces.
What else is the NCDOI working on right now and over the next year?
Currently, our primary focus is the ongoing regulation of licensed captive insurance companies. Each captive insurer is assigned to a direct and supervising analyst in our division, responsible for monitoring the financial health and compliance of each insurer. The analysts utilise the annual reports, audit reports, statements of actuarial opinion, and other information filed by captive insurers.
Through the analysis process, any questions or issues of concern that arise are addressed directly with the insurers for resolution. We are also evaluating applications for new captive insurers, business plans of new proposed cells, and amendments to current business plans, all of which requires the NCDOI’s prior approval. These filings have been steady throughout the year. As we approach the end of the year, we expect these submissions to increase in number.
The NCDOI is internally discussing proposed insurance legislation for the 2020 short legislative session. These discussions include legislation regarding the North Carolina captive insurance programme that may be necessary to improve the law and maintain its relevance.
We will continue training and educating our captive insurance regulatory team in accounting and insurance matters related to the captive insurance programme through captive courses, webinars and conferences. Two team members, Leane Rafalko and Michael Arcangel, are about to complete their associate in captive Insurance coursework through the International Center for Captive Insurance Education.
As in the prior years, our team will be involved in numerous captive events in the upcoming year to obtain an education, to educate others about the use of captive insurance, and to promote North Carolina’s captive insurance programme. I have the pleasure of participating in a captive insurance regulatory panel with captive regulators from other states at the Self-Insurance Institute of America Conference at the end of September. On the panel, we will discuss captive insurance topics from a regulator’s perspective.
Our division is already planning our exhibits and participation at the World Captive Forum, the Captive Insurance Companies Association Conference, and the Risk Management Society Conference, which are all taking place during the first half of 2020. We will also exhibit and participate in the North Carolina Captive Insurance Association’s conference that will be held May 13 to 15 2020, in Durham, North Carolina at the Washington Duke Inn & Golf Club.
