What’s Making Waves in the Captive Space: A 2022 Cayman Captive Forum Recap
After a two-year hiatus, it was great being able to attend The Cayman Captive Forum in person this year. As the Cayman Islands is the second largest captive domicile, and the first for healthcare captives1; it is the perfect location to share leading trends in the captive world, and the warm temperatures and tropical views made it all the more enjoyable. If you weren’t able to attend or could use a refresher after returning to the “real world,” this quick recap might be of interest. Below are some of the buzziest topics at this year’s conference.
1) Tax Updates
On large attraction to captive insurance (and certain domiciles) relates to tax advantages. It’s complicated, though. Some of the tax-focused sessions presented at the conference were:
– Mike Domanski, a lawyer from Honigman LLP, discussed offshore federal tax considerations and U.S. tax reporting requirements in his session titled “Captive Insurance: Basic Tax Fundamentals.”
– In a session titled “The State of Tax: What You Need to Know,” experts discussed U.S. federal tax updates and how taxes will be affected by the Inflation Reduction Act and updates to Section 831(b).
– The penultimate presentation titled, “U.S. Tax Update” tackled IRS and compliance updates in the U.S. on both the federal and state levels.
2) Cyber Risks
Since the start of the pandemic, employers had to adjust to remote and hybrid workplace policies. This transition forced employers and employees to rely more on digital tools to conduct day-to-day operations and made organizations more susceptible to breaches. This is not the first year that cyber took the spotlight, but there were some great discussions around risk in this area, including:
– A session titled “Placing Cyber Liability in Your Captive” reviewed current trends in cyber treats and how insuring cyber in a captive can prevent devastating losses.
– Risk and Cybersecurity experts from the Cleveland Clinic explained why the healthcare industry commonly falls victim to cyber attacks and outlined steps to take to protect patient and caregiver privacy in their session, “Current & Future Cyber Risks In Healthcare: ‘Will you still love me, tomorrow?’”
3) Healthcare-Specific Coverages
In recent years, we have been seeing an increasing number of healthcare organizations leverage their captive to bring new and industry-specific lines. At this year’s Cayman Captive Forum we learned about how captives can be used for the following emerging and alternative risks:
a) Medical Malpractice/Medical Errors
As the Cayman Islands is the most popular captive domicile amongst healthcare organizations, there was a large focus on healthcare-specific risks. There was a particular emphasis on how healthcare employers can reduce and prepare for potential medical malpractice/errors as noted in the following sessions:
– Presenters from the “Criminalizing the Clinical Defendant: Straight from the Headlines” session facilitated a mock deposition to address common medical malpractice trends and how they should be addressed.
– A session titled “Can your Captive Eradicate the Impact of Covid on its Medical Malpractice Program? Will It Ever End?” reviewed how medical malpractice can impact claims and legal outcomes.
– Dr. Dan Shapiro Ph.D., explained his experiences with burnout in the healthcare industry and steps employers can take to support healthcare workers in his presentation “Labor Shortages, Employee Burnout & Medical Errors: Working Together to Improve Results.”
b) Workplace Safety & Patient Care
Workplace safety is another non-traditional captive line (outside of employee benefits and Property and Casualty [P&C]) gaining traction. Healthcare organizations and, more specifically, healthcare workers and patients are prone to violence and discrimination more so than staff in other industries.
– In the session “Workplace Violence in Healthcare,” Trinity Health’s Diane Moritz explained initiatives their captive board are taking to prevent workplace violence injuries and support victims of patient violence.
– Children’s National Hospital’s Chief Diversity Officer, Denice Cora-Bramble discussed biases in data reporting for diverse patients, and experiences minority patients face when seeking health services in the session, “DEI Impact on Quality and Safety of Care.”
– I was joined by lawyer, Michael Domanski in a pre-recorded session titled “Using a Captive to Fund Long-Term Care,” during which we reviewed the current LTC market and different captive models (both taxable and tax-exempt) that can cover long-term care policies.
As we transition into a new era of captive insurance, this year’s Cayman Captive Forum acted as a perfect vehicle for addressing current and future themes in the industry. It was a strong end (almost) to an exciting year and we look forward to next year’s conference to continue these and other important discussions. Our team was fortunate to be part of the action in the Cayman Islands this year and is here to answer any questions you may have related to an existing or new captive program. Check out our captive expertise here and let’s chat!