It seems like every year we are seeing new developments in the world of captive insurance on both the national and international scales. After recently attending The Captive Insurance Companies Association (CICA) 2023 International Conference, I wanted to share some of the hot topics on the minds of captive professionals around the world. As a board member of CICA and chair of CICA’s NEXTGen young and new professionals committee, I was excited to be so involved this year. The conference definitely did not disappoint; in addition to “extra-curriculars” like the golf tournament and brewery tour, the event also provided great opportunities for networking and learning about current trends and best practices in the world of captives and what the future holds for the industry. I hope you enjoy these highlights.

1. Regulatory and Tax Updates

As per usual, regulatory updates were a highly discussed topic during the conference. As a long-term attendee and speaker at CICA’s annual conferences (and other captive conferences alike), regulatory updates are always pertinent, as laws and best practices are constantly shifting, as seen in the following:

– In a session titled “The Lay of the Land: Captive Taxation,” speakers explored recent administrative, legislative, and judicial updates affecting captive taxation, with a focus on 831(b) small captives.

– Following the addition of 87,000 IRS agents (following the Inflation Reduction Act), a group of tax experts and a lawyer discussed how this will most likely impact audits of small captive cases.

– Three state regulators from North Carolina, South Carolina, and Oklahoma discussed updates we can expect to see from various domiciles during their session, “There’s a New Sheriff (Regulator) in Town.”

– On the second day of the conference, I presented on “What’s New with the DOL and Employee Benefits?”, where we delved into the upsides of writing employee benefits into a captive and how it intersects with DOL regulations.

2. Navigating Inflation

From eggs to rent, no sector can avoid inflation, including the captive/alternative risk financing arena. With that being said, controlling costs and reducing risk is a top priority for many employers across industries and around the world. This year I heard some exciting ideas when comes to addressing inflation, some of which included:

– The second session of the conference looked at innovative captive risk and finance tools captive owners should consider in the current economic landscape and how to mitigate uninsured risks often excluded in captive structures.

– Actuarial experts discussed how inflation will impact unpaid claim liabilities and future funding levels and approaches actuaries are taking to combat this. The session was titled “The Impact of Inflation and Other Economic Trends on Captive Programs.”

– In contrast to typical inflation sessions, one panel focused on social inflation, and reviewed how captive owners should prioritize safety culture, utilize user-friendly insurance technology, and ensure suitable hiring and retention practices.

3. The Captive Formation Process (Experiences from Captive Owners)

A couple sessions turned the tables and looked at captives from a different point of view: that of the captive owner. It was very interesting hearing from captive owners on their experiences with forming a captive and what goes through their minds during the process.

– The presentation, “Captive Formation Stories,” featured three captive owners and a moderator from Captive International, to discuss their internal strategies, domicile selection, and how their experience has been to date with their captive.

– Panelists from the “CaptiveLand: A Journey to Forming a Captive” session took a unique approach and styled the presentation like a board game (Candyland), helping risk managers navigate the obstacles and milestones when setting up and maintaining a captive. The panelists included two captive owners and a state regulator.

4. Shaping the Future Captive Arena

As the Chair of CICA’s NEXTGen young and new professionals committee, I was impressed with the focus CICA put on providing sessions and events aimed specifically towards young professionals looking to enter or grow within the industry. As regulations, best practices, technology, lines of services and more constantly change, it is essential that the next generation of captive professionals are equipped and ready to shape the future of the practice.

– One of my favorite parts of the conference was the CICA Student Essay Contest. University students were given 3 case studies to select from and wrote an essay on establishing a captive for their specific case study (including selecting policy options, determining underwriting and pricing, etc.).

– During the session, “Building Your Personal Board of Directors – Considerations During the Different Stages in Your Career,” speakers discussed the upsides to developing a personal Board of Directors to support career growth and how to get started.

– Finally, I spoke on a panel that discussed what NextGen captive professionals value most in a job. We looked at ways to combat the great resignation and how organizations can better align with young professionals’ career goals.

With many conferences under my belt, CICA never fails to provide a great platform for networking and sharing ideas, I am excited to see what the future has in store for the association and for captives overall. In the meantime, our team will continue to keep our fingers on the pulse of captives to assure we provide clients with industry-leading captive and alternative risk financing services.