Build your captive on firm foundations: VCIA panel

Companies that form new captives need to be aware of all the potential advantages – but also be mindful of the disadvantages they might face, according to the first panel session at the Vermont Captive Insurance Association’s 2024 annual conference. 

At the session, called ‘Captive Immersion: Feeling Puzzled? Let’s Piece It Together’ a nine-strong panel of experts from all segments of the captive industry (captive owner, legal, audit, management, actuarial, banking and investment, and regulatory) talked the audience through a general overview of captive insurance, including a deep dive into the purposes and benefits of captives. 

The panel was made up of Amy Angell, principal and consulting actuary at Milliman; Pete Dysart, attorney at law at Primmer Piper Eggleston & Cramer PC; Todd Burrows, senior account manager - business development at AM Best; John James, head of business development at Performa; Linda Johnson, EVP & chief underwriting officer at Old Republic Risk Management; Daniel Linton, senior consulting actuary at Pinnacle Actuarial Resources; Theresa Severson, SVP Insurance & Risk Birch Property & Casualty; Anne Marie Towle, chief executive Hylant Global Captive Solutions; and Amber Walsh, captive insurance examiner/analyst at the State of Vermont, Department of Financial Regulation.  

The panel stressed that it is important to understand the life cycle of a captive, and how each service provider is integral to the successful operation of a captive. 

It was underlined that a captive is a long-term venture and that it is important to set it up correctly, with the right regulator and with good risk management practices. 

The panel explained the different types of captives and the need to use the correct captive format when first setting up a captive for a company – it’s important to assess what you need and the best way to cover it, the panel all agreed. 

Speakers underlined that the primary reason behind the creation of the captive – risk transfer versus risk retention – must be properly understood as this is vital for the creation of captive. 

The panel also stressed that captive structures could change over time as they evolve and that it is vitally important to carry out feasibility studies at the creation of the captive – and then keep an eye on developments along the way. 

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