Debbie Walker, under the leadership of Commissioner Mike Causey and Chief Deputy Commissioner Dr. Michelle Osborne, oversees the captive insurance regulatory team in North Carolina, which has been recognized around the world for its impressive record. Sr. Deputy Commissioner Walker is a Meredith College graduate who is also a CPA. She is the rarest of people – a veteran regulator with decades of industry and regulatory experience, that finds time to help business owners and advisors with any questions. We thank Debbie for her dedication and spending a little time with us today!
1. What is a Group Captive- and how is it different than traditional insurance?
Let me first explain that, in general, a captive insurer is a licensed insurance company, formed to insure the risks of its owners and affiliates and certain unrelated entities. It is an alternative to the traditional insurance marketplace and may help to reduce insurance costs, stabilize premium, and provide customized policy terms and conditions. There are other benefits as well to forming a captive insurer.
A group captive insurer is a type of captive insurer that insures the risks of its unrelated members.
Because captive insurance companies do not provide insurance to the general public, they are regulated under different laws from those applicable to traditional insurance companies who do serve the general public.
2. You have led the NC Captive Division since its inception 5 1/2 years ago. How has it grown?
It is hard to believe that 5 ½ years have passed by already. The Division has experienced substantial growth since the North Carolina Captive Insurance Act became effective in October of 2013. We now have a team of 13 professionals, in addition to our in-house actuarial team, dedicated to the licensing and ongoing financial surveillance of captive insurers licensed in our state. The regulatory team is comprised of credentialed, knowledgeable and experienced insurance accounting professionals with a focus on appropriate regulation of the captive insurers and customer service to the industry. Today we regulate over 240 active captive insurers licensed in North Carolina. Those insurers include 30+ protected cell and special purpose captive insurers, which have established over 450 cells or series.
3. Could you tell us about Berkley Insurance and their recent announcement?
There is limited information that we can share at this time, but Berkley Accident and Health announced that it has selected North Carolina as its domicile for a new protected cell captive insurance company that will house group medical stop loss cells. As employers evaluate ways to manage rising healthcare costs, one alternative mechanism they are using is captive insurance.
4. How will Berkley’s Captives be regulated?
Following licensure, all captive insurers that are licensed in North Carolina must comply with the provisions of the North Carolina Captive Insurance Act (NCGS 58-10 Part9). A direct and supervisory financial analyst team is assigned to each captive insurer upon licensure, and the analysts are responsible for the direct ongoing financial regulation of each insurer. This includes the financial evaluation of various financial filings submitted to the Department annually, such as the annual report, audit report, and actuarial opinion. If a captive insurer desires to amend its Department-approved business plan, the insurer must first submit an approval request that details the changes. The request must contain all information necessary for the Department to fully understand and evaluate the proposed change. If the Department approves the business plan amendment, then the captive insurance company can proceed with those changes.
5. A unique part of your job involves education, marketing and promotion of North Carolina’s captive programs. Could you tell our business executives and advisors how they can learn more about Captives?
You are correct – the Department has the unique responsibility to educate the public about North Carolina’s captive insurance law that provides for the formation and operation of captive insurers. A captive insurance company may be a mechanism that business owners and their advisors find useful in managing a company’s risks. Our Department’s website, www.nccaptives.com, is a useful source to find information on the reasons to form a captive insurer; general steps involved in forming a captive insurer; reasons to select North Carolina as the captive insurer’s domicile; the list of approved captive managers; our electronic brochure about the North Carolina captive insurance program; contact information for our captive regulatory team; and links to other useful resources. Our captive regulatory team is available and accessible at any time to address the public’s questions about captive insurance.