Dennis Harwick, Captive Insurance Companies Association (CICA)


Dennis Harwick of the Captive Insurance Companies Association outlines the challenges facing the captive sector in 2012 and CICA’s ongoing efforts to provide support to the burgeoning international captive industry.


and opt not to be taxed on their premium income) for small or closely held businesses. Some see legitimate uses for 831(b)s. Others are concerned that the emphasis by some marketers on selling 831(b) captives as a wealth transfer device without proper consideration of the risk transfer issues is just setting up this whole segment of the industry for a major attack from the IRS. CICA continues to emphasise in both its programming and in its publications that captives should be considered for a broad set of carefully considered strategic reasons and not with a narrow emphasis on tax.


CICA: representing captives internationally


I have the honour of serving as president of the Captive Insurance Companies Association (CICA), the only domicile-neutral trade association for the captive insurance industry and the oldest captive insurance trade association in the world. This year we will be celebrating our 40th anniversary at the 2012 International Conference to be held in Scottsdale, Arizona, March 11 to 13.


Legend has it that CICA started when a group of risk managers who


got together each year for a golf outing started talking about captives. Golf is a much smaller part of the International Conference today, but the camaraderie between captive professionals remains a key part of the formula. And nowadays we have two days of concurrent educational sessions to formalise the information exchange process.


Of course, it is a much more complicated world now. The utilisation


of captives as an alternative to the commercial insurance markets is well established throughout Europe and North America and is gaining ground elsewhere. Each new region brings its own unique twist to the captive industry but the hallmark of captive insurance companies is that they are adaptable, created as they are to adapt to needs that the commercial market cannot, or will not, meet.


Over the past few years, CICA has spent more time looking at the regulatory environment for captives. Traditionally, as a domicile-neutral organisation, CICA did not engage in much lobbying. But it has become


increasingly clear that having a unified voice in a sector as divided as the captive industry is increasingly significant. The CICA board is committed to examining ways to increase our resources so that we can add the staff needed to take a more formal role in monitoring, communicating, and responding to legislative and regulatory challenges in a more cohesive, proactive fashion.


CICA upgraded the infrastructure of its website in 2011 and is now working on several connected community discussion groups that will allow carefully identified groups to discuss issues candidly among themselves. In particular, we will create a discussion group for captive owners that will expressly exclude service providers, so that captive owners can discuss their concerns frankly and openly.


As usual, CICA will continue to work closely with its many partners


in the captive domicile association arena, including the European Captive Insurer and Reinsurer Owners Association (ECIROA). We will be co-sponsoring the 2012 European Captive Forum in Luxembourg on November 13-14 with ECIROA.


CICA also continues to partner with the International Center for Captive Insurance Education (ICCIE) to bring knowledge and skill- building to the professional staff of captive insurers and captive service providers. ICCIE provides its educational products entirely through remote delivery, delivering both certification-based education (leading to an associate in captive insurance [ACI] designation) and modular educational units.


This will be a year of challenges on both the economic and regulatory fronts, but captives have proved year in and year out that they are here to stay. The growth of captives in the EMEA market is yet another confirmation that this alternative risk vehicle addresses the changing needs of risk managers and insurance buyers.


Dennis Harwick is the president of the Captive Insurance Companies Association (CICA). He can be contacted at cica@cicaworld.com


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