Captive Insurance Companies Association (CICA) Special Section
CICA 2011 annual conference
reflects changing times
By Michael J. Moody, MBA, ARM
Over the past few years, a number of states have taken notice of the benefits of allowing captives to be formed in their states. As a result, more than 35 states have enacted captive insurance legislation to allow for captive formations. A number of these domiciles, as well as most of the more established captive domiciles, have been holding either annual or bi-annual educational conferences. At this point, hardly a week passes without notification of yet another captive domicile-related conference.
However, one of the biggest annual captive conferences is that of the domicile-neutral captive association, Captive Insurance Companies Association (CICA).
This year's conference, titled "Changing Times - Distinctive Solutions," will be held at the Westin La Paloma in Tucson, Arizona, March 13-15.
The opening day will feature several networking opportunities, including a golf tournament and a tennis mixer. A tour of the Sabino Canyon will be offered during the afternoon, and a reception will conclude the first day's events.
Educational programs will begin on Monday, March 14, with the opening session as well as the presentation of CICA's Distinguished Service Award and Outstanding Captive Awards. Next on tap will be two forums, one for captive owners and the other for captive managers. These sessions are designed to provide peer-to-peer information sharing.
Breakout meetings with domicile regulators will also be held on March 14. These one-on-one meetings will provide participants (both captive owners and prospective owners) with an opportunity to have direct conversations with a variety of domicile regulators. Participants can ask questions or make comments to representatives from the domicile.
Back by popular demand will be "Captive/RRG 101 - The Basics of Alternative Risk Transfer." According to CICA, this session has proven to be beneficial for rookies and seasoned veterans alike. Much of the session is built around the information provided in CICA's "Captive Overview" publication and provides a background for upcoming sessions.
Monday afternoon will include several important sessions; however, one of the key sessions is sure to be "Legislative and Political Developments in Healthcare and Financial Service Reform." This is a topic that is certain to dominate the 2011 captive agenda. Both recent health care legislation as well as the Dodd-Frank bill will affect rulemaking at both the state and federal levels for years to come. But how will it affect captives? This panel will provide insight into this issue.
Another notable session will focus on employee benefits. This topic will be discussed in depth at "Employee Benefits in Captives - The Tried, Tested, and the Cutting Edge." The panel will include several experts, including a risk manager who has gone through the U.S. Department of Labor's approval process.
A variety of topics will be covered during other sessions, including risk retention groups, captive investment plans and cell captives. Additionally, the state of the fronting market will also be addressed in a separate session. This session will review the results of the 2011 fronting survey which includes the data from the members' surveys, as well as analysis of the data from a panel of veteran fronting participants. All of these sessions will provide timely advice regarding the captives' current situation.
Other sessions will include an update on tax-related issues provided by the CICA trifecta of captive legal experts, Tom Jones, Chaz LaValle and Bruce Wright. Information from these three veterans constitutes the most up-to-date thinking within the captive industry.
Sessions that reflect the changing landscape of today's captives include:
• Strategic Planning for Mature Captives - To Anticipate and Prepare for Inevitable Changes
• Utilizing Claims Management Pro-Activity to Boost Operational Performance
• Global Captives - Opportunities, Pitfalls and Regulations
• Use Your Captive to Enhance Capital Management
• Beyond Your Traditional Captive
• Enterprise Risk Management: Captives in the Spotlight
Finally, one of the sessions that CICA President Dennis Harwick called attention to was "To FASB or to IASB. That is the Question." He notes that new proposals by both the FASB and the IASB are directed at accounting issues related to the "Insurance Contract." During this session, Harwick will summarize the different proposals, as well as the effects on the insurance industry in general and, more specifically, the captive insurance industry.
Motivational speaker Erik Wahl will be this year's conference keynote speaker. The goal of his presentation, called "Art of Vision," is to inspire professionals to achieve greater levels of performance through creativity. He will spend the remainder of the conference completing a painting that he started during that keynote presentation. Once done, the painting will be auctioned with the proceeds going to a charitable cause.
One of the strategic goals of the CICA conference, as well as the Association's overall game plan, is to develop relationships with other international groups. Over the past few years, CICA has been working with the European Captive Insurance and Reinsurance Owners' Association (ECIROA). Harwick notes that a positive working relationship has developed between CICA and ECIROA over the last two years. Of course, an important agenda item for ECIROA has been Solvency II which is projected as having an implementation timeline that officially starts in 2011. Harwick indicates that Solvency II was the impetus for starting ECIROA, as well as the driving force for the expanding relationship with CICA.
According to Harwick, one of the overriding aspects of the growing relationship between the two associations is that "many of our members are larger international corporations that have operations throughout the world. As a result, it is in our members' best interest to maintain relationships that provide us with insight and a place at the table when it comes to world captive topics."
He points out that the Solvency II issue is just one example of how well this relationship process can work. Just how all of these accounting standards ultimately will shake out is an unknown, however, "with input from ECIROA, we think our members will be well served in this important area." Several of this year's sessions reflect the broader view of the captive community that is associated with ECIROA's involvement.
Only time will tell how captives will evolve. One thing is certain: The captive landscape is changing. The 2011 CICA Conference is designed to provide the most up-to-date information and analysis of matters of interest to captive owners and prospective owners.
As with last year's conference, CICA has made every attempt to incorporate suggestions provided by its members and service providers in structuring both the content and tone of the meeting. This is the one meeting that provides a 360-degree view of the captive movement. Since the Association is domicile-neutral, much of the information provided at the conference is the best available over a wide variety of captive topics and issues.