We’re excited to announce that our Analyst, Spencer Towle, was featured in Captive International’s FORTY Under 40 Awards this year! The award spotlights the most influential figures in captive insurance under the age of 40. You can find his winner Q&A responses here.

We’re excited to announce that our Consultant, Aviel Shalev, was featured in Captive International’s FORTY Under 40 Awards this year! The award spotlights the most influential figures in captive insurance under the age of 40. You can find his winner Q&A responses here.

We’re excited to announce that our Senior Consulting Actuary, Nick Frongillo, was featured in Captive International’s FORTY Under 40 Awards this year! The award spotlights the most influential figures in captive insurance under the age of 40. You can find his winner Q&A responses here.

We’re excited to announce that our SVP, Prabal Lakhanpal, was featured in Captive International’s FORTY Under 40 Awards this year! The award spotlights the most influential figures in captive insurance under the age of 40. You can find his winner Q&A responses here.

In a recent Financier Worldwide Podcast episode, our SVP, Prabal Lakhanpal speaks about what captive insurance entails; the drivers behind its growing popularity; how businesses can apply it to fund their risks and bridge gaps in coverage; how it can lead to greater capital efficiency and better structuring of risk; and what the next evolution of captives might be. You can find the full episode here.

Captive International recently released its Forty Under 40 Awards, which spotlights the top industry leaders under 40 years old impacting captive insurance. We are excited to announce that four of our colleagues were on this list this year! You can find the full list here.

Prabal Lakhanpal (Senior Vice President)
Nick Fongillo (Senior Consulting Actuary)
Aviel Shalev (Consultant)
Spencer Towle (Analyst)

In a recent article on Captive.com, spotlighting the CICA session, “Employee Benefits and Medical Stop-Loss: A Partnership between HR, Finance, Risk, and Markets,” our SVP, Prabal Lakhanpal explains the legal process of setting up a captive and results employers can expect. You can find the full article here.

The 2025 Captive Insurance Companies Association (CICA) Annual Conference brought together professionals from across the risk management industry to explore emerging trends and challenges. Held in Tucson, Arizona, this year’s event featured thought-provoking discussions on regulatory updates, emerging risks, and innovative solutions. Below are the key themes that shaped the agenda.

1. Regulatory and Tax Updates

Regulatory changes continue to be a significant concern for captive owners. With the new administration and shifting regulations, staying up to date is critical for ensuring compliance and mitigating risks. Notable compliance-focused sessions included:

– “IRS Audits – Now and the Future”: This session examined the evolving landscape of IRS audits and the impact on captive owners, providing insights into anticipated changes.

– “What’s New / What’s Hot / What’s Not – Tax News You Need”: Presenters explored the latest tax updates that affect captive insurance structures, with a special focus on M&A implications.

2. Emerging Risks: Climate Change and Sustainability

As the world grapples with climate-related challenges, captives are increasingly seen as vital tools for managing environmental risks. This year’s conference addressed how captives can integrate climate resilience into their risk management strategies. Some notable sessions include:

3. Innovative Technologies in Captives

Technological advancements are revolutionizing captives, enhancing risk management, claims handling, and overall operational efficiency. Technology continues to be a key driver for the future of the industry. Several sessions focused on innovative technology being used in the industry:

4. NextGen and Diversity in Captive Insurance

The future of the captive industry depends on cultivating a diverse and dynamic workforce. CICA’s commitment to engaging young professionals and promoting diversity was evident throughout the conference. Here are some presentations I thought best highlighted the importance of prioritizing diversity and ensuring the long-term success of the industry.

– “Diversify Your Team, Multiply Your Innovation”: This session highlighted the importance of diversity in driving innovation within captive programs and provided strategies for building inclusive teams.

– “Amplify Women and NEXTGen Networking Luncheon”: A key networking event designed to connect young professionals with industry leaders, providing mentorship and career development opportunities.

As always, the CICA Annual Conference provided a valuable platform for networking, learning, and sharing ideas within the captive insurance community. It was a privilege to engage with so many passionate professionals dedicated to driving innovation and shaping the future of captives. From navigating regulatory complexities and embracing new technologies to addressing emerging risks and fostering diversity, this year’s discussions showcased the dynamic nature of the captive landscape.

As we look ahead, we remain committed to staying at the forefront of these evolving trends and delivering forward-thinking solutions to our clients. We look forward to continuing these conversations and seeing what next year’s CICA conference will bring.

The past year has seen a surge in class action lawsuits against some of the largest employers in the country, alleging that fiduciaries are breaching their duties in deciding how to allocate forfeitures. While these claims are not necessarily valid, it may be prudent to take a moment during your next benefits committee meeting to review what your plan document requires, assess what your plan is currently doing, and determine whether any changes are necessary.

Before this recent litigation, the issue of forfeitures appeared to be well settled. Participants in a 401(k) or similar defined contribution plan are always fully vested in their own contributions. However, many plans impose a vesting period before participants become fully vested in employer contributions (such as matching contributions). If a participant leaves the company before completing the vesting period, the employer contributions are forfeited. According to the IRS, these forfeited amounts can be used by the plan sponsor to offset plan expenses or reduce employer contributions. Consequently, many plan documents allow both uses of forfeitures and leave the decision to plan fiduciaries.

In these class action lawsuits, plaintiffs allege that using forfeitures to reduce employer contributions, though permitted by the IRS under the Tax Code, violates ERISA’s fiduciary duties, which are administered by the Department of Labor (DOL). Plaintiffs argue that forfeitures are plan assets and, as such, may only be used to pay benefits or the reasonable expenses of the plan. They further contend that ERISA’s duty of loyalty requires fiduciaries to prioritize participants’ interests over those of the plan sponsor. Specifically, the lawsuits claim that using forfeitures to reduce employer contributions rather than to offset participant-borne plan expenses constitutes a fiduciary breach.

It is important to note that these cases are in their early stages, that the legal theories involved are novel, and that the DOL has never taken the position that using forfeitures to reduce employer contributions is a fiduciary breach. Nevertheless, given the current controversy, plan fiduciaries may benefit from reassessing their approach to forfeitures by addressing three key questions.

1. What does your current plan document provide?

Plan documents often take different approaches to forfeitures. Some mandate a single use, while others specify an order of priority for different uses or allow multiple uses at the fiduciaries’ discretion. Fiduciaries should be familiar with the requirements of their specific plan document.

2. What is your plan actually doing?

Fiduciaries are obligated to follow the terms of the plan document. For example, if the document requires forfeitures to be used to offset plan expenses, using them to reduce employer contributions would constitute a breach of duty, and vice versa. Unlike the recent lawsuits, the duty to adhere to plan terms is a well-established legal principle that the DOL has enforced in the past. Fiduciaries should ensure their practices align with their plan document and consult legal counsel if any discrepancies are identified.

3. Does your current plan language reflect your intentions?

In light of recent litigation, it is worth considering whether the current plan language aligns with your goals. Do you want fiduciaries to have discretion, or should the plan document provide clear direction? For instance, if the plan document specifies that forfeitures will be used to reduce employer contributions, fiduciaries must follow that directive unless it is determined to be unlawful. Clear guidance in the plan document may shift the decision from a fiduciary responsibility to a “settlor” decision by the plan sponsor, reducing fiduciary discretion and potential liability.

There are several approaches to handling forfeitures, and fiduciaries should consult with legal counsel to evaluate the specifics of their plan and circumstances. However, taking the time to review your plan’s current practices is a straightforward and valuable step and a sensible addition to your 2025 fiduciary checklist.