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2013 Vermont Captive Insurance Association (VCIA) Special Section

"Most of our panelists are captive owners. That's what makes our conference unique." —Richard Smith President Vermont Captive Insurance Association

VCIA 2013: New frontiers in captive discovery

Record number of sessions and networking opportunities abound

By Michael J. Moody, MBA, ARM

The Vermont Captive Insurance Association (VCIA) annual conference will be held in Burlington, Vermont, from August 13 to 15, with opening day networking activities including the golf tournament held at the Vermont National Country Club. Additionally, a number of first-day educational sessions will be held at the University of Vermont's new Davis Center, located about 1/4-mile from the host hotel, the Sheraton.

According to Richard Smith, VCIA president, the first-time attendee's orientation session is scheduled to begin the first day's educational programs. He notes that "when you consider the sessions at the VCIA conference, most of our panelists are captive owners. That's what makes our conference unique."

Conference overview

Smith says that this year's event has a total of 24 educational sessions, and he goes on to point out "that's the most educational sessions and panels we have ever had." And he says, "While it's important to hear from the experts like lawyers, captive managers and other service providers, the captive owners' perspective is extremely important as well."

A few years ago, VCIA began offering Captive 101 and 102 sessions on the opening day of the conference. This year a 103 session—featuring case studies from three captive owners—has been added. There will be several other important topics covered during the first day—enterprise risk management, managing medical costs, captive governance as well as captive processes and controls. Smith notes that there is also a Peer-to-Peer Forum scheduled for later the first day. The day wraps up with a reception in the exhibit area.

Events on the second day include the VCIA annual meeting and legislative update, which will feature remarks from distinguished guests including Vermont Governor Peter Shumlin (invited), and a keynote address during the general session by Frank Nutter, president of the Reinsurance Association of America (RAA).Winners of the coveted Captive Crusader, Honorary Member, and Industry Service awards will also be announced.

Smith says a number of interesting sessions are scheduled for the second day of the conference, including one on cyber risk insurance—a hot topic since it is of growing importance to participants in all industries. Among the other topics covered during the second day of the conference are:

• Membership Modeling: The Answer to Group Captives Membership Retention. Attendees at this panel discussion will learn about the three general approaches to membership retention: past experience, technical, and practical. Key concepts like entitlement to profits, capital accounts, notional/contractual, and withdrawal penalty will be presented.

• Accountable Care: The New Frontier. This seminar will provide attendees with first-hand knowledge from a panel of experts about the impact the Accountable Care Act—which has become closely linked with health care reform efforts—has had, and will have, on health care captives.

• Accounting and Auditing Updates. Attendees of this session will receive details about the accounting and auditing standard changes for 2013 that are applicable to captives.

• Reinsurance for Group Captives and RRGs. Panelists will present a basic level understanding of the purpose, types, and forms of reinsurance available in the marketplace so that participants can explain the financial and risk management implications that captive and RRG owners/managers should consider and manage as part of their roles and apply the presented concepts in evaluating captive and RRG operations.

• Navigating the New Tax Frontier: Advanced Taxation. This session will detail how the Health Care Act will affect the captive industry; describe what FATCA is and explain what effect it will have on the captive industry; interpret the new guidance issued by the IRS and understand how it relates to attendees' companies or clients; describe the updates on the clarification of NRRA and its applicability to captives.

Smith points out that several popular forums are scheduled during the day. Both the Captive Owners Forum and Group Captive Forum will occur the second day. The day concludes with a reception to be held at the ECHO Lake Aquarium and Science Center at the Burlington waterfront.

Sessions scheduled for the third day start with the popular Hot Topics session which features David Provost, deputy commissioner of the Captive Insurance Division of the Vermont Department of Financial Regulation, discussing current trends and challenges. This session is followed by a discussion of the implications of the Affordable Care Act and how health care providers are responding to it. The third day's agenda also includes: Premium Deficiency Reserve Requirements, Assessing Capital Needs, and Risk Focused Examinations. Additionally, the final forum—Health Care—will be held.

The conference concludes with luncheon keynote speaker FBI Special Agent Jeff Lanza. His talk, titled "Leadership Ethics: How to Ensure a Future of Success with Integrity," is based on his 20-year career as an FBI Special Agent, during which he investigated organized crime, cyber-crime, sex trafficking and terrorism. Along the way, he learned what causes the white collar criminal to step over the line and how their decision making relates to human morality, values and character. Lanza wraps his insights and perspectives in entertaining stories and humorous anecdotes to help professionals achieve a future of success and accomplishment while maintaining steadfast and unwavering integrity.

What the future holds

Smith indicates that this year's conference is again expected to host over 1,000 attendees which predictably raises the possibility of having a change of venue. For the past few years, the VCIA Board has actively studied the possibility of moving to another city, namely Stowe, Vermont. "This is a topic we look at every year," he reports. And every year the Board asks that the Association "continue to review the costs and logistics." But he says, "The logistics don't really change; thus, it's really a matter of costs." Based on the current review, he states, "right now there is no definite plan to move the conference."

The VCIA conference is one of the largest, if not the largest, conferences dedicated exclusively to the captive insurance community. Each year, the Association plans and delivers a conference that provides the latest thinking regarding captive formation and implementation. In addition to the sessions on a wide variety of subjects, the conference allows participants to take advantage of numerous networking opportunities. This year's agenda again looks like an excellent chance for newbies and captive experts alike to keep up to date on the rapidly changing captive landscape. Insurance agents who are looking for a learning experience to broaden their knowledge base should consider attending the VCIA conference.

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