14 June 2016USA analysis

Connecticut licenses captive insurance cooperative

The Connecticut Insurance Department has licensed its 11th captive, a non-profit captive insurance cooperative.

The cooperative is comprised of several Connecticut municipalities and school districts that will give communities greater control of their health insurance costs, according to insurance commissioner, Katharine Wade.

Wade said: “The Department is pleased we can help provide the creative solutions that captive insurers offer to businesses and organizations in help managing their bottom line.

“Our captive insurance regulatory unit works collaboratively with applicants to make certain the captive being formed is sustainable and provides the long-term benefits for which it was designed.”

The new cooperative, CT Prime, will be managed by the Capitol Region Education Council (CREC).

CREC organised the cooperative to help municipalities which self-insure their employee health insurance.

According to the department, towns that self-insure pay their own medical claims up to a certain threshold, but once that is exceeded, the towns have a “stop-loss” insurance policy through a private insurer to pay the rest.

It suggests CT Prime will now give member towns more bargaining power with private insurers to get better rates.

Governor Dannel Malloy said: “Delivering efficiencies is critical. We are very fortunate in Connecticut to have the expertise of the insurance and financial sectors, which can help set up and appropriately manage subsidiaries like this one and save people dollars. Without question, Connecticut is the insurance capital of the world.”

Greg Florio, executive director of CREC, added: “We know there is savings in numbers, and forming CT Prime will undoubtedly give municipal and school officials broader purchasing power, an essential tool in managing costs for taxpayers. We greatly appreciated the Insurance Department’s expert guidance as we went through the licensing process.”