DC will not license medical stop loss captives

Washington, DC will not allow medical stop-loss captives to be licensed, according to Dana Sheppard, associate commissioner of DC’s Department of Insurance, Securities and Banking.

Sheppard made the comments in an educational seminar which also featured Melissa Hancock, president of the Captive Insurance Council of the District of Columbia and was organised by this body.

Sheppard said that the District’s size and intention to comply with the Affordable Care Act as major factors in the decision.

“Washington, DC is not in favour of allowing small employers located in DC to self-insure their healthcare risks, including the establishment of medical stop loss captives, if their motivation for doing so would result in removing young and healthy persons from the exchange, leaving older and less healthy employees in the exchange. We believe this will turn the District’s exchange into a high risk pool, a result the District would obviously wish to avoid,” Sheppard said.

Sheppard went on to say that Washington, DC would also not license medical stop loss captives for employers in other jurisdictions.

He concluded: “our position on these types of captives is the same regardless of whether the captive is writing stop loss coverage directly to the plan or is assuming coverage from a commercial insurer that is providing stop loss coverage to the plan.”