Writing in our US Captive title, Dennis Harwick, president of CICA, argues that a recent New York regulatory report attacking offshore captives is a ‘political document’ that fails to differentiate true captives from so-called ‘shadow insurance’.
Harwick said that Shining a Light on Shadow Insurance: a Little-known Loophole that Puts Insurance Policyholders and Taxpayers at Greater Risk, the report produced by New York Superintendent of Insurance, Benjamin Lawsky “represents a casual broadside at the traditional captive insurance industry when the focus of the report (for those willing to drill down into its content) relates to a specific kind of transaction by New York-based life insurance companies utilising special purpose vehicles—sometimes called XXX captives—to reinsure certain liabilities.”
Harwick said that the report uses the word captive in a “casual and misleading way” and one that has brought evident harm to the sector, when the focus of the report was in fact directed elsewhere. “Unfortunately, lazy grammar often makes for good politics,” he said.
CICA stance has since been supported by the president of the National Association of Insurance Commissions (NAIC), who criticised Lawsky for his broad-brush criticisms and his call for a “vaguely worded national moratorium on captive insurance transactions”.
Dennis Harwick, captive insurance, shadow insurance, CICA