A HISTORY OF CICA
From a handful of trail-blazing founding members, CICA has evolved into a truly global industry association representing hundreds of captives and industry service providers. Here, its roots, milestones and future expectations are explored by a group of industry veterans who have seen it all.
of the Captive Insurance Companies Association (CICA). Present were Les Boughner, Dennis Harwick, Thomas Jones, Mike Lusk, Michael Mead and Hugh Rosenbaum—a group with an undeniably impressive depth of captive experience, much of it associated with their work with the CICA, and much of it intrinsically linked with the development of captive insurance from the 1970s until the present day.
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The early days CICA was formed in 1972, created by a handful of US captive owners who wished to discuss problems relating to their relationship with fronting companies and reinsurers. In the later 1970s tax concerns loomed large and those captive owners decided to develop a voice for the industry. As Rosenbaum explained “nobody else but the captive owners themselves knew their specific needs and concerns” and so they created an association that would represent the captive industry. In time CICA became a significant forum for industry debate and a platform from which its voice could be projected.
In the early days, however, CICA kept its doors firmly closed to all but captive owners, with its membership slowly built up by large multinationals based out of the US that recognised the value of CICA as a key industry forum. Initially there were no group captives and no service
hen you are talking about captives—US captives in particular—it would be difficult to bring together a more illustrious group on one teleconferencing call than that which gave its views on the 40-year history
providers, with attendance at association events permitted by invitation only. This changed slowly over time as closed door sessions slowly began to include CICA members, group captives and, most recently, service providers. As Boughner indicated, this shift from a members-only organisation to a more inclusive approach was not a “forced evolution”, rather it was a long-term development, as CICA changed its focus from “an association of owners to become a voice for the industry”.
The association, which began with a handful of members, had within a few years reached the low 30s, but it wasn’t until the 1980s that there was a conscious decision to grow the membership. This brought numbers up to around 100—all captive owners—and the inclusion of service providers and group captives brought the number of members up to where it is today. At its peak each year during the International Conference, CICA’s membership is well over 400. However, many CICA members own or represent multiple captives, so the actual reach is much higher.
Milestones Over the years CICA has achieved a number of significant milestones, both as an association and on behalf of the industry. Perhaps the most significant has been the leadership role CICA has played in heading off attempts by the US Internal Revenue Service (IRS) to limit the tax and deductibility benefits of captives, which began with IRS Ruling 77-316 in 1977. CICA and industry lobbying helped to defeat the efforts to limit the role of captives in risk transfer. Hugh Rosenbaum observed
CICA | Forty years of captive leadership 13
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