Captives

A page-one New York Times article this week slammed state captive insurance laws, stating that they allow companies to “conduct Bermuda-style financial wizardry” in the U.S., but the Times company, it turns out, has its own captive domiciled in New York.

An article in The New York Times comparing captive insurance to “the shadow banking system” has Vermont’s captive regulator puzzled and frustrated, because while some of the observations are true, they don’t add up to a fair representation of the captive industry, he says.

The Liability Risk Retention Act (LRRA) will be celebrating its 25th anniversary in October of this year, marking many changes in liability insurance during that time. Changes include establishment of the two entities enabled by the LRRA—risk retention groups (RRGs) and risk purchasing groups (RPGs)—as effective alternative risk transfer vehicles.

Vermont’s captive insurance growth in the 2011 first quarter is the strongest start to a year since 2005, attributable to a wider understanding of the benefits of captive insurance, says the state’s captive regulator.

RIMS President Scott B. Clark has personal reasons for calling to action members of the Risk and Insurance Management Society, asking them to reach deep into their pockets to help survivors of Japan’s earthquake and deadly tsunami.

There is a lot of anticipation surrounding the Government Accountability Office’s investigation of some states’ interpretation of the federal Liability Risk Retention Act. For months the GAO has been questioning risk retention group owners and managers, seeking comments on the treatment received from various states.