DCIA 2015 Fall Forum
Aaron Hillebrandt

DCIA 2015 Fall Forum

Aaron Hillebrandt November 18, 2015 Posted in: Blog Posts, Captives, Insurance / Insurers
The Delaware Captive Insurance Association (DCIA) held its 2015 Fall Forum, November 11-12, on the riverfront in Wilmington. Attendees included leading captive service providers, captive owners, and Delaware’s captive regulators. Educational session topics ranged from cyber liability and reputational risks to the evolution of group captives and best practices for captives.

Steve Kinion, Director of the Bureau of Captive and Financial Insurance Products (the Bureau), reiterated to attendees how important it is to Delaware to be a captive friendly environment. As of November 1, Delaware has 989 active captives and 12 active protected cells. A few intriguing highlights from the regulatory update session include:

  • The Bureau is considering prohibiting LLC investments that can’t be valued, as they tend to produce qualified CPA opinions that the regulators are not comfortable accepting. The investment itself does not pose a concern, but the regulators want it to be valued. This applies even in the case where the CPA opinion is unqualified “except for” the LLC investment. We expect further discussion around cases where the materiality of such investments is small relative to the operations of the captive as a whole.
  • Delaware is going to allow dormant captives. Captives will be eligible to go dormant if there is no premium or risk accepted in a calendar year. To go dormant, the captive would need to become a special purpose captive and there would be no minimum premium tax, but the $400 annual license fee would still apply. Mr. Kinion stated there would be no audit or statement of actuarial opinion required for dormant captives, even if there are loss reserves still on the books from periods prior to going dormant.
  • Delaware requires series captives to have at least $250,000 of capital with the core, for the contingency that a member of the series may go insolvent. To date, Delaware has licensed over 700 series and there have been no insolvencies. As a result, the Bureau is leaning towards reducing the capital required for the core. A decision is expected in 2016, and $50,000 and $100,000 were mentioned as possibilities, but zero capital with the core is not on the table.
Presentations from the DCIA forum can be found online here.

The DCIA 2015 Fall Forum provided great networking opportunities and educational sessions, and we look forward to participating in future forums.

ahillebrandt@pinnacleactuaries.com

For more information about Aaron, visit his People page.
«November 2017»
SunMonTueWedThuFriSat
2930311234
567891011
12131415161718
19202122232425
262728293012
3456789