Connecticut hopes to boost its status as a home for specialty insurance companies called “captives.”
Sometimes rather than using a private insurance company, businesses will form an insurance company of their own. That’s a move that can save money and help them plan for long-term insurance needs.
It can also help them assure discretion over claims against them. It’s effectively like a company insuring itself.
Charter Communications is one of the latest businesses to site its captive insurance company in the state.
Connecticut’s Insurance Department is positioning itself as a center of expertise on regulating captives.
“We’ll work alongside the company and their consultants, to figure out what structure works best for them,” said Commissioner Katharine Wade, “making sure that they have the captive well capitalized, are working through how claims are processed and handled, doing risk management, and making sure that they’re effectively managing their captive.”
The state is hosting a two-day conference this week, looking at the latest trends in captive insurance.
Michael Maglaras runs a consulting company in the industry, and he heads up the Connecticut Captive Insurance Association. He said it’s a perfect fit for Connecticut, and should boost the state’s economy.
“When captives are formed, they hire service providers,” he said. “And those service providers are in this case Connecticut accountants, and underwriting people and claims management people, and auditors and others - actuaries - who do excellent work, and who are here and who are among the best and brightest in our industry, living right here in Connecticut.”
Sixteen captive insurers have been licensed and established in the state in the last three years, and the insurance department says more deals are pending.