From: Captive International

Every captive owner should review their captive or risk financing vehicle on a regular basis to ensure it is fit for purpose – and make changes as required to ensure it is fulfilling its purpose and doing the best job possible for the owner.

That was the message from Robert Blasio, Managing Director, GB Specialty, speaking on a panel discussion called ‘It Isn’t Broken, but Could it Use a Tune-Up?’ held at the Captive Insurance Companies Association (CICA) [International Conference], taking place in Tucson this week (March 6-8).

Blasio was joined by three other speakers to discuss, specifically, changes made to the The Emory and Clifton Casualty Insurance Company (CCIC). He was joined on the panel by: Shulamith Klein, Vice President, Insurance Services, Emory Healthcare; Maryann McGivney, Healthcare Industry Leader, North America, Willis Towers Watson; and Chad Wischmeyer, Managing Partner, Oliver Wyman Actuarial.

The presentation examined why captive owners should constantly evaluate the current operational needs of their captive. Emory University has had its own captive for many years and, due to certain organizational changes, sought an independent operational assessment. This assessment resulted in extensive operational changes, highlighting that the need to consistently evaluate best practices in light of market conditions is essential to effective management.

Klein explained the background of CCIC. Formed in 1981 in Colorado, it initially insured only Emory-employed physicians. In 1999, following the expansion of the captive to cover the entire organization, it re-domiciled to the Cayman Islands.

She also explained the significance of tort reform in Georgia. In 2005, the state enacted tort reform including caps on non-economic damages. But much of this was overturned by 2010 by Georgia’s Supreme Court. This dovetailed with a rapid growth at Emory, which is now 200% larger than when CCIC was re-domiciled in Cayman.

The captive suffered significant underwriting losses in 2018 and 2019 – largely due to a perfect storm of nuclear medical malpractice verdicts in Georgia and nationwide. In 2021, ranked #3 in terms of so-called judicial hellholes.

GB Specialty was brought in to do a 360-degree analysis of Emory’s management and claims operations. It reviewed more than 100 claims, many internal documents and litigation guidelines and interviewed some 20 individuals before generating a report with findings and recommendations.