Effective regulation is at the heart of a successful captive insurance industry. It’s not surprising, then, that a flurry of recent of moves at the highest level of a number of states’ captive regulatory operations caught the captive industry’s attention.
“Captive regulators and good regulation are the backbones of the captive insurance industry,” said Dan Towle, president of the Captive Insurance Companies Association (CICA). “If we don’t have qualified regulators, the industry is in jeopardy.”
The good news: the states that saw top regulators exit over the past year or so managed to fill those vacancies with experienced regulators, and captive business seems to have proceeded without skipping a beat.
Still, with the issue of attracting and developing necessary talent a hot topic across the captive insurance industry, the recent turnover among top captive regulators has made regulatory talent an issue worth considering. In fact, it will be discussed as the subject of a session at CICA’s upcoming 2023 International Conference in Rancho Mirage, California.
Titled “There’s a New Sheriff (Regulator) in Town,” the March 7 CICA conference session will see a panel of new top captive insurance regulators answering questions about their domicile’s response to the turnover and whether captive owners are likely to see any changes.
Panelists on the session include Lori Gorman, deputy commissioner of the North Carolina Department of Insurance; Steve Kinion, captive director in the Oklahoma Insurance Department; and Joe McDonald, director of captives in the South Carolina Department of Insurance—Captive Division. Gerald Yoshida, partner at Goodsill Anderson Quinn & Stifel, will moderate the session.
North Carolina, Oklahoma, and South Carolina are among the US domiciles that have seen turnover in the ranks of their top captive regulators over the past year through a combination of retirements and career shifts. Others include Vermont, Tennessee, and Delaware.
With that turnover, the captive regulatory operations of a full one-third of the top 15 US domiciles saw changes at the top over the past year, said Mr. Kinion. “And that’s probably something that’s never happened before,” he said. Education and knowledge sharing are essential to raising productivity, such that the regulatory industry is not just surviving but thriving, Mr. Kinion explained.
“In my opinion, potential issues facing the industry, any domicile, and its captives around changes in regulators, are how new regulators will approach captive regulation in general, how any new approach will impact a domicile’s reputation and therefore the captives that choose to domicile there, and how new relationships will change the regulation of a particular captive,” Mr. McDonald said. “If new regulators take a drastically different approach or consider regulating captives in the same manner required to regulate traditional companies, then this can cause instability in a domicile, which will impact the captives already there, and possibly alter the decision of new companies on whether to domicile there.”