The Delaware Department of Insurance and Vermont Captive Insurance Association (VCIA) have disagreed with the conclusions of a new paper by the International Association of Insurance Supervisors (IAIS) covering the regulation of captives.
The Application Paper on the Regulation and Supervision of Captive Insurers report was created by IAIS to update the guidance available to insurance supervisors on the application of aspects of regulation and supervision specifically relevant to captive insurers or reinsurers.
VCIA said in its comments to IAIS: “The paper initially recognises that risk inherent in a captive insurer can vary substantially. However, this important point does not carry through the rest of the paper and the entire paper should be reconsidered with this in mind.
“Specifically, the VCIA believes the rest of the paper does not develop supervisory approaches that match the inherent risk of the varying risks of the captives to the marketplace, but rather treats all captives the same.”
The Delaware Department of Insurance also said: “Delaware disagrees with the conclusion that captive insurance management must reside in the same jurisdiction as the captive insurer. The profession of captive insurance management is a cross border profession that relies upon technology.
“Many captive managers effectively operate in different jurisdictions. While a physical presence may have at one time been necessary, it is no longer necessary today.”
The Delaware Department of Insurance did, however, say that the paper’s release was “timely” due to the continuous growth of the number of captive insurers and captive insurance domiciles.
Other organisations were more positive about the paper, including Willis Global Captive Management, part of Willis Group, which said it would provide “invaluable guidance to supervisors in jurisdictions that are, or wish to become, new entrants into the regulation of captives.”
Delaware Department of Insurance, Vermont Captive Insurance Association, IAIS, North America, Europe