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OFFICIAL CONFERENCE NEWS 2010
SHOW
WEDNESDAY
AUGUST
11
Business Insurance
NEWS IN BRIEF
Vermont issues
900th captive license
Domicile’s growth remains brisk
By RODD ZOLKOS
MONTPELIER, Vt.—Vermont has
issued the 900th captive license in
the domicile’s 29-year history,
announcing Tuesday that license
number 900 had been issued to Lincoln Financial Group.
With $140 billion in assets under
management, Radnor, Pa.-based
Lincoln Financial Group, the marketing name for Lincoln National
Corp. and its affiliates, is a provider
of annuities; life, group life and disability insurance; retirement plans,
savings plans and comprehensive
financial planning services.
“These milestones are something the entire Vermont captive
industry can share in,” said Dan
Towle, director of financial services
for the Vermont Agency of Commerce and Community Development.
Benefits captive expert
joins brokerage Willis
BOSTON—Kathleen Waslov, an
expert in the use of captive insurers
to fund employee benefit risks, has
joined Willis Group Holdings P.L.C.
as a senior vp and senior resource
consultant in the insurance brokerage’s Boston office. Previously, Ms.
Waslov was a consultant with Towers Watson & Co., where she was
involved in Coca-Cola Co.’s application to fund retiree health care benefits using the Atlanta-based company’s South Carolina-based captive and a voluntary employees’
beneficiary association. Ms. Waslov’s role will be to lead Willis in the
captive benefits funding area.
MONTPELIER, VT.—As this year’s
VCIA conference begins, Vermont
finds itself celebrating a captive
milestone amid what’s shaping up
as another good year for captive formations.
And, while the state announced
its 900th captive license Tuesday
(see related story), with 22 new
licenses issued thus far in 2010 and
a pipeline full of potential applications waiting to make their way to
Vermont regulators, it seems likely
the 900 figure will soon be left far
behind.
Vermont licensed 39 captives in
2009, the sixth-best year for the 29year-old domicile.
“I don’t know how to qualify or
quantify the years anymore, but
this year seems to be a very good
one,” said David F. Provost, deputy
commissioner in the Captive Insurance Division of the Vermont
VERMONT CAPTIVES 2009 SNAPSHOT
LICENSES ISSUED: 39
ACTIVE CAPTIVES [ YEAR END ]: 560
GROSS WRITTEN PREMIUM:
$77.48 billion
NET WRITTEN PREMIUM:
$73.84 billion
PREMIUM TAXES: $23.5 million
TOTAL ASSETS: $134.43 billion
Source: Vermont Department of Banking,
Insurance, Securities and Health Care
Administration
Department of Banking, Insurance,
Securities and Health Care Administration. The formations this year
represent “a little bit of everything,
just like last year,” Mr. Provost said.
Among the companies forming
See MIDYEAR page 7
Outgoing VCIA chair praises
Vermont captive work ethic
By JERRY GEISEL
BURLINGTON, VT.—As Vermont
approaches the 30th anniversary of
the passage of the state’s landmark
captive statute, the domestic captive insurance company king is not
about to rest on its laurels, the outgoing chairman of the Vermont
Captive Insurance Assn. says.
“There is a Yankee work ethic in
Mr. East
the Vermont captive community.
They come in early and do what is
needed to get the job done,” said
Tim East, who also is a director of
risk management at The Walt Disney Co. in Burbank, Calif.
With Disney sponsoring two
captives, Mr. East speaks with experience about Vermont’s appeal.
See EAST page 7
INSIDE TODAY’S ISSUE
CHANGES GOOD
CLAIMS & OCCURRENCES
NEW THIS YEAR
BY THE NUMBERS
Q&A: GOV. DOUGLAS
CAPITAL ISSUES
VCIA SCENE
PAGE 3
PAGE 3
PAGE 4
PAGE 4
PAGE 4
PAGE 5
PAGE 6
“
R
QUOTABLE AT VCIA: We never take anyone’s business for granted. We want to keep in touch and make whatever reforms we can
to continue to attract captives here. GOV. JIM DOUGLAS
Entire contents copyright by Crain Communications Inc. All rights reserved.
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OCCURRENCES
BUSINESS INSURANCE | CONFERENCE NEWS
AUGUST
11
VCIA leader Smith looks ahead
By RODD ZOLKOS
BY
RODD
ZOLKOS
s always, it’s wonderful to be here in
Vermont, particularly for this 25th
annual conference of the Vermont Captive Insurance Assn.
The quarter-century milestone is an
accomplishment well worth noting for
this fine event and the organization
sponsoring it, which has meant so
much to the domicile’s success.
Through events like this and its other
activities throughout the year, the VCIA
continues to advance the fortunes not
just of its individual members, but also
the captive industry as well.
So have a good conference, reconnect with friends and colleagues, enjoy
your time in Vermont, and look to these
pages for daily conference news. I look
forward to seeing all of you.
A
W
WEDNESDAY
BURLINGTON, VT.—As Richard
Smith, president of the Vermont
Captive Insurance Assn., looked
toward his first VCIA conference,
he sounded a bit awed by the
teamwork that makes the event
happen.
“The team here is amazing,” he
said, speaking of the VCIA staff
and the association’s members.
“These are members who are
either service providers or captive
owners, whatever, but they’ve got
real full-time jobs,” Mr. Smith said.
“But they’re the ones who really
pull the seminars together, the sessions, the keynote speakers. Everything we do really rests on their
shoulders, and they do a tremendous job for us. And, of course, the
staff here. They’re sort of the mortar and the bricks.”
Since taking his position with
the VCIA in October, the organization’s president also has been
struck by the teamwork he sees
within the captive insurance
industry. “It’s really interesting
just what a close-knit community
the captive insurance world is,” he
Richard Smith became president of
the VCIA last October.
said. “People really pull together,
they work cooperatively.”
Mr. Smith came to the VCIA
from Vermont state government,
where he had been deputy commissioner of the Vermont Public
Service Department. He replaced
Molly Lambert, who left the
Burlington-based VCIA after seven
years as president to become the
U.S. Department of Agriculture’s
state director for rural development
for New Hampshire and Vermont.
Mr. Smith also had served as
Vermont’s deputy commissioner
of economic development, which
gave him some exposure to the
state’s captive industry, as well as
an opportunity to work with Ms.
Lambert.
“Following Molly Lambert is no
easy task, because she set an
extremely high bar,” he said. “I’ve
known her for years. When she
was secretary of commerce I
worked under her and just think
the world of her.”
Going forward, while Mr. Smith
wants the VCIA and the state to
explore emerging captive markets
and continue innovating in terms
of technology and regulation, he
said the primary goal is to continue doing what the state already
has done so well.
“The No. 1 goal is really continuing the work of Molly and the
board and the folks in the regulatory world here in Vermont, doing
the things we always do to attract
the type of quality captives we
always do,” he said. “From my perspective, maintaining Vermont’s
gold standard is our No. 1 goal.”
New Vermont captives director embraces role
By RODD ZOLKOS
MONTPELIER, VT.—Vermont’s new
director of captive insurance isn’t a
newcomer to the state’s captive
division; she’s a 13-year veteran.
In moving into the position previously held by Peter Raymond last
month, Sandra A. Bigglestone
demonstrated the depth of Vermont’s captive regulatory team,
allowing the captive division to
deal seamlessly with the departure
of a 22-year captive industry veteran when Mr. Raymond left to
become a contract examiner and
consultant with the Florida Hurricane Catastrophe Fund.
➥
➥
It’s not the first time Ms. Bigglestone has followed Mr. Raymond
into a position in the captive division. Before becoming director of
captive insurance, she was director
of financial examinations, the same
position Mr. Raymond held before
becoming captive director.
“I keep following in his footsteps, although this time this is it.
I’m not going to follow him out the
door,” Ms. Bigglestone said, adding,
“I was very grateful to have his
guidance and knowledge all those
years.”
The chance to become director
of captive insurance “was a great
opportunity, a natural progression,”
Ms. Bigglestone said. “The goals are
still the same. We’re going to help
companies operate great risk management solutions and focus on
quality programs. I’m looking forward to continuing that strategy.”
The new director of captive
insurance also said she’s received a
positive response to her move from
across Vermont’s captive industry.
“We still have a great team,” she
said. “I’ll be helping out training
the open positions. Hopefully we’ll
promote from within. But there will
be movement and we’ll create
opportunities for people to come to
the department and help out with
all the great things we do here.”
Sandra A. Bigglestone, who served
as director of financial examinations,
now leads Vermont’s captive division.
VERMONT FACTS: As of Dec. 31, the top five industry categories among Vermont captives were manufacturing (107), health care (89),
banking (50), insurance (44) and professional services (31).
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This year’s VCIA conference
features several new events
BURLINGTON, VT.—The agenda
for this year’s Vermont Captive
Insurance Assn. conference includes several new items, including a Wednesday morning “game
show” focused on captive insurance issues and the Vermont
domicile’s history.
David F. Provost, deputy commissioner in the Captive Division
of the Vermont Department of
Banking, Insurance, Securities &
Health Care Administration, will
host the round of “Double Indemnity,” which will test the minds
and memories of captive industry
contestants during Wednesday
morning’s general session.
Also new this year will be a
Meet the Markets session at 9 a.m.
Thursday in the tent. That session
will offer an opportunity to meet
with providers of asset management services and lenders providing letters of credit and Regulation 114 trusts.
This year’s conference also will
offer two “peer-to-peer” sessions
for captive owners. Those sessions
run from 8:30 to 10:15 a.m.
Thursday, with one focusing on
manufacturing and the other on
banking and insurance.
Another change in this year’s
VCIA agenda is that the keynote
presentation will come at the end
of the conference, during a ticketed sit-down luncheon in the
tent. That event, at 12:30 p.m.
Thursday, will feature John
Jacobs, co-founder of Life is good
Inc.
Earn
CPE/CL
E
Credit!
October:
Educational Audio-conference:
“International Financial
Reporting Standards”
2:00 - 4:00 pm
October 26:
VCIA Original Captive Road Show
Houston, TX
as where we usually are and some
tough budgetary decisions.
It’s been a tough couple of years
for us, but we’ve fared better than
other states because of the diversity
of our economy, and one sector
that provides diversification is the
captive insurance industry.
Q: Has the economy had any impact on
Vermont’s commitment to captive
insurance?
I
Q&A
Gov. Jim Douglas
Like his predecessors since the
early 1980s, Vermont Gov. Jim
Douglas has been a strong supporter of the state’s captive
industry. And, as he prepares to
leave office in January, he’s confident the state’s next governor
will support the industry as well.
t’s interesting—we’ve been
downsizing state government, as
I suspect a lot of other states have,
but we’re adding two new positions
to the captive division this year. So
we continue to make that commitment where we need to, regardless
of the other stresses on state government.
So we’re investing. Other states I
know of had to scale back their
commitment or reduce their efforts
at regulating and promoting captives, but we’re continuing to
invest.
Q: Why is the captive industry so
important to Vermont?
Q: As you prepare to leave the
governor’s office, do you expect your
successor to be just as committed to
captives?
O
T
bviously, for our state’s economy, it’s an important sector
that’s been quite successful for us
for quite a long time. It’s one reason why in this tough economy
that the entire nation is facing that
we’ve fared relatively well. I emphasize the adverb because we’re still
feeling a lot of stress here with
unemployment that’s twice as high
he commitment to the captive
industry has been unwavering,
it’s been bipartisan. And I’m confident that whoever succeeds me will
continue to support our efforts and
work with captive insurance companies, because it’s a strong sector in
our economy and it’s a commitment that Vermonters want to
keep.
BY THE NUMBERS
Vermont captive growth: Total number of captives licensed by year
November:
VCIA Original Captive Road Show
Cleveland, OH
878
754
527
December: VCIA Hot Topic
Educational Seminar (topic tbd)
also available by audio-conference
www.vcia.com
385
279
174
1
’81
33
’85
’89
’93
’97
’01
’05
Source: Vermont Department of Banking, Insurance, Securities and Health Care Administration
4
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Session to explore impact of crisis
By RODD ZOLKOS
BURLINGTON, VT.—Among the sessions drawing the most interest at
this year’s Vermont Captive Insurance Assn. conference is one this
afternoon titled “Capital and Collateral in Crisis.”
Given captive industry concerns
about the financial crisis’ impact on
capital and collateral, it’s not surprising that the 1 p.m. session is so popular. Possibly surprising, however,
will be one panelist’s take: the actual impact on captives hasn’t been
that great.
“The bottom line is that it has
had an impact—perhaps a subtle
impact—on whether people are
thinking hard about forming new
captives,” said Gary Langsdale, risk
officer for Pennsylvania State University in State College. “But surplus continues to rise, the number of
captives formed continues to rise,
➥
➥
“
Our company didn’t form a
captive to think about getting in and out
because we need a couple of dollars.
GARY LANGSDALE,
PENNSYLVANIA STATE UNIVERSITY
and I’m going to be taking the view
of the captive owner and say, ‘Our
company didn’t form a captive to
think about getting in and
out because we need a couple of
dollars.’ ”
“But it will also be interesting to
hear the perspective of the other
speakers,” the Penn State risk manager said.
Other panelists include John
Andre, group vp at Oldwick, N,.J.based A.M. Best Co. Inc.; David F.
Provost, deputy commissioner in
the Captive Insurance Division of
the Vermont Department of Banking, Insurance, Securities and Health
Care Administration; and John
Lochner, senior consultant in Towers
Watson & Co.’s insurance consulting business in Weatogue, Conn.
Perspective might vary, Mr.
Langsdale said. “But as the token
captive owner on the panel, maybe
it’s just me, but I think the captives
are there and this isn’t going to
change it.”
Business Insurance
VICE PRESIDENT/PUBLISHER
MARTIN J. ROSS III
ASSOCIATE PUBLISHER/
ONLINE GENERAL MANAGER/
EVENT DIRECTOR
PAUL D. WINSTON
EDITOR
REGIS J. COCCIA
EDITOR-AT-LARGE
JERRY GEISEL
SPECIAL PROJECTS EDITOR
RODD ZOLKOS
ASSISTANT MANAGING
EDITOR—NEWS
MATT SCROGGINS
ART EDITOR
WILLIAM MURPHY
PHOTOGRAPHER
MICHAEL MARCOTTE
ON THE WEB VCIA: The Vermont Captive Insurance Assn. Conference Show Daily produced by Business Insurance is available
online. To share conference news or revisit information after the event, visit www.businessinsurance.com.
November 8-10, 2010
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Midyear
East
Continued from page 1
Continued from page 1
captives this year in Vermont are Procter &
Gamble Co., PricewaterhouseCoopers
L.L.P., Crowe Horwath L.L.P. and Towers
Watson & Co.
“We’ve still got a good flow of new business coming in,” Mr. Provost said. “I’ve
been to three managers in the past couple of days, and each one of them says,
‘I’ve got an app just about to come to you
again.’ So as soon as we clear off a pile of
applications, we’ve got a new stack coming
in.”
“I think it’s just that we are being consistent and are doing the same things that
we have always done,” said Mr. Provost.
“I’ve been turning away business that didn’t suit us, and even had some of these
companies come back and say, ‘OK, we
changed our business plan. Does this suit
you now?’”
This year has seen a change in the captive division’s leadership, with Sandra A.
Bigglestone, formerly the division’s director of financial examinations, moving
into the director of captive insurance position last month, replacing Peter Raymond, who has left the captive industry.
“We still make a strong commitment to
captive regulation,” said Gov. Jim Dou-
“We wanted to be in a
domicile where captives
would be held to the highest standards, where regulation would be fair but
firm and where the state
would recognize and provide the resources needed,”
Mr. East said.
Vermont has the largest
captive regulatory staff of
any state. Mr. East describes
the state’s top captive regulator, David F. Provost,
deputy commissioner in
the Captive Insurance Division of the Vermont
Department of Banking,
Insurance Securities and
Health Care Administration, as “exactly what I
want to see in a regulator.
He always is willing to listen. He dives in and gets
into the detail.” But if
something won’t work, he
isn’t afraid to say so, Mr.
East said.
There has been regulato-
Mr. Provost
glas. “Our deputy commissioner, Dave
Provost, is doing a great job. We lost our
director, but his successor’s been in the
department for the 13 years, so Sandy Bigglestone has a lot of experience as well.
And, of course, Dan Towle (director of
financial services in the Department of
Economic Development) from the commerce agency is part of our team, too.”
“We’re still No. 3 behind Bermuda and
the Caymans, but we’ll keep at it,” the
governor said.
“It comes in waves,” Mr. Provost said.
“We get three or four at a time, wrap them
up, we get a week off and three or more
come in.”
MARKETPLACE
ry turnover. Mr. Provost,
then an assistant chief
examiner in the Captive
Insurance Division, succeeded Len Crouse when
Mr. Crouse retired two
years ago.
And Sandra A. Bigglestone, a 13-year veteran of
Vermont’s captive division,
succeeded Peter Raymond
as director of captive insurance when Mr. Raymond
left last month.
“Sandy is great. She has
been here a long time and
understands the technical
issues,” Mr. East said.
The VCIA has had its
own turnover. Mr. East was
involved in the nationwide
search that selected Richard
Smith, then deputy commissioner of the Vermont
Department of Public Service, to succeed Molly Lambert as VCIA president.
Mr. East describes Mr.
Smith as disciplined,
focused and organized,
with the ability to zero in
on detail, while also understanding the big picture.
To place your ad contact Monique Murray at 212.210.0129 or email [email protected]
CLAIMS SERVICES
Advertisers in this section
can also be found online at:
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CONSULTANTS
7
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The Leading Onshore Captive
Domicile is also a beautiful place
to go offshore.
Lake Champlain, Vermont
You can set sail on the high seas for some far off captive domicile, or you can more
easily take a tack to Vermont — where you’ll find some of the most knowledgeable
captive experts in the world, a flexible regulatory environment, and a responsive,
proactive government dedicated to keeping your captive business steady as she
goes. Explore more by visiting www.vermontcaptive.com
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