Captive Insurance Companies Association Special Section

CICA: 2012 annual conference marks 40 years of leadership

Array of educational sessions keeps pace with changes in the captive market

By Michael J. Moody, MBA, ARM

To the surprise of many, the captive industry continues to flourish despite a prolonged soft property and casualty insurance market. Much of this continued captive expansion illustrates the growing maturity of today's corporate insurance buyers and their brokers. One of the groups that has provided continued guidance to the captive community is the Captive Insurance Companies Association (CICA) which is celebrating its 40 years of service at this year's International Conference. The conference is slated to run from March 11-13.

Interest in CICA's annual event has also been high, thanks in large part to what was established as and has remained a domicile-neutral association. The conference, which takes place this year at the Westin Kierland Resort in Scottsdale, Arizona, is structured to provide the perfect blend of information for the various interests of the captive industry participants. It has appeal for captive owners as well as prospective captive owners. However, interest is also high from various service providers including captive managers and domicile regulators and officials who are is search of up-to-the minute educational and networking opportunities.

A key reason for the continued interest cited by prior participants is that the conference provides captive-specific educational sessions that frequently offer peer-to-peer opportunities to explore the complete range of uses for captives. It has also been widely recognized that CICA, with its domicile-neutral focus, can take a much broader view of the captive marketplace. Several years ago, CICA began to take advantage of participant feedback in designing its educational sessions. Today, past participants praise the laser targeted educational program.

2012 conference highlights

Opening day at any CICA conference provides ample networking opportunities. Two popular events will again be offered and include a golf tournament as well as a tennis mixer. Always aware that some participants will not be interested in the athletic events, CICA has also arranged for a tour of Los Cedros, a one-of-a-kind Arabian horse facility. Not only are the horses among some of the top bloodlines, but the facility buildings provide many gorgeous details as well. An opening day reception will bring to a close the first day's events.

Of special note is the keynote address at the opening general session which will be given by six-time Emmy Award comedian, Ross Shafer. In addition to being a comedian, Shafer is also a network TV host and writer. He has written four business books including Nobody Moved Your Cheese. As part of his presentation, he will "highlight case studies that illustrate the key qualities leaders must have to be competitive in today's business world," according to CICA. As has been the case over the past few years, the opening session will conclude with the announcement of CICA's Distinguished Service Award and Outstanding Captive Award winners.

The educational program begins on Monday, March 12, following the opening general session. It is followed by two forums, one for captive owners and the other for captive managers. Each of these sessions has been planned so that participants can have a dialogue about their day-to-day challenges, and how to best deal with them. Additionally, the captive manager session features an open dialogue between CICA leaders and captive managers. It should be noted that both of these sessions are limited-access forums.

In order to assist participants in the proper session selection, CICA has again utilized a numbering system to denote the experience level that each session would ideally require. Beginner sessions will carry a 101 number; intermediate sessions will be noted by the 201 session number; and advanced sessions carry a 301 number. The agenda includes ample sessions for all experience levels.

A popular beginner session with CICA members is the "Captive 101—Back to the Basics with Captive Industry Leaders." This session will be presented as a panel discussion with speakers that include a captive owner, captive manager and an attorney, who are all familiar with the feasibility aspects of a captive. Other 101 sessions include "Board Governance: Thorough Board Education Impacts Captive Results," which will illustrate the positive impact a well-educated board can have on the captive. In addition, CICA has a primer on captive taxation that carries a 101 designation.

Pioneering programming

There will be a multitude of other topics covered during the 201 and 301 sessions. Among key sessions are risk retention groups, captive investment plans and cell captives. However, this year's conference will provide significant focus and insight into a number of critical legal and regulatory requirements. In addition to the 101 session on captive taxation, this year's agenda includes advanced sessions on taxation of segregated accounts, and tax updates that will detail whether captives are "under siege or it is just business as usual." CICA tackles the regulatory issues with sessions that deal with the impact of Solvency II, an annual accounting and audit update, and a new session that deals exclusively with the effects of the Nonadmitted and Reinsurance Reform Act of 2010 and its effects on captives. Additionally, an up-to-the-minute review of the current status of the GAO report regarding RRGs will also be provided.

Additional topics that further illustrate the breadth of information that is available at the conference include captive insurance company planning, status reports regarding the middle market captive opportunities and options. Additionally, sessions about whether or not to consider placing property coverage in the captive and several health-related sessions are scheduled.

Over the years, one of CICA's most popular sessions has been the one that reports on the results from the fronting survey. Recently, CICA has been expanding the scope of the fronting survey to provide captive owners with additional benchmarking data. This year, CICA will provide the results of the survey again; however, it is greatly enhanced due to the addition of new topics. The new survey, known as the "CICA Captive Market Study," will be provided by a panel of experts.

CICA continues its commitment to international

Many CICA members are international corporations with operations spread throughout the world. As a result, for the past few years CICA has been expanding the focus and mission of the group. In this regard, they have been developing relations with the European Captive Insurer and Reinsurer Owners Association (ECIROA). While initially the primary focus was directed at a concern regarding Solvency II, the associations soon found that they have many other things in common than just the pending legislation.

According to Dennis Harwick, CICA's president, this growing partnership will be responsible for "producing the biennial European Captive Forum in the fall of 2012 in Luxembourg. The very nature of all these worldwide legislative efforts remains unsettled; therefore, CICA believes that it is imperative that the two organizations maintain this close working partnership."

Conclusion

The CICA leadership continues to turn to the association's membership for help in developing the agenda for this year's conference. The members, after all, offer session ideas that are of the most value to them. For example, new Chair Dirk Heim notes that many of the members and prior conference attendees have indicated their preference for case study type sessions. As a result, this year's conference has several programs built around the case study concept. Harwick states that the CICA leadership strives to keep the conference "current and topical."

But for many CICA members, it's the networking opportunities that set the CICA conference apart. Heim points out that when he first started attending CICA conferences, "I was mainly interested in meeting other captive owners and learning from them." The captive market is changing rapidly due to both increasing competitive pressures and various new government regulations, so Heim notes it is important that the conference be used as a means "to keep informed on these types of changes as well as how they will affect our member firms." This type of information is not only important for captive owners, but to agents and brokers who work in the captive arena. Providing clients with recent and relevant information regarding captives is one way to differentiate an agency in this changing market.