More communication key to captive regulation
State regulators and captive organisations, from associations to insurers, need to communicate as much as possible if they are going to succeed to their full potential, according to a panel at the Captive Insurance Companies Association (CICA) annual conference in Palm Springs, California.
It is important that staff in state regulatory departments must be exposed to events like CICA 2023 as much as possible, the panel stressed, so that they can hear about the many issues that captives face.
It is also important for regulators to realise that captive insurers are different from traditional insurers and therefore need to be handled differently, the panel said, with education and training being key to coping with this.
The panel was moderated by Gerald Yoshida, partner at Goodsill Anderson Quinn & Stifel and had representatives from three states: Lori Gorman, deputy commissioner from North Carolina, Steve Kinion, captive director of the Oklahoma Insurance Department, and Joe McDonald, captive director for South Carolina.
Kinion pointed out that at the upcoming meeting of the National Association of Insurance Commissioners (NAIC), the traditional insurance industry would follow the NAIC regulators – but in the captive market it’s the other way around, with regulators asking captives and captive associations what they want.
Communication was underlined as a key aspect of the relationship between regulators. The recent roadshow to Mexico City, involving the Vermont Captive Insurance Association and officials from regulators in Vermont as well as other state officials, was highlighted as an interesting new development in terms of communication and cooperation – one that others might emulate.
The panel also said that change is inevitable in the captives market, and that it is therefore extremely important to get state regulators as informed and prepared as possible to react swiftly to any developments such as staff changes, so that the right people can be appointed to the right places.