The CICR September 2016 captive report published an article titled "The Telemedicine Revolution and Captive Insurers," presenting views on the growing number of telemedicine programs spanning state lines and the complexity of multi-level regulation. The article was co-authored by Karen Byank Mathura and Lauren Bicknese, both senior healthcare specialists and claims and risk management consultants. The article argues: "Using captive programs to broadly cover and expand projections of such emerging risks allows telemedicine distributors and providers to be more creative and forward-looking in protecting themselves and their joint venture partners from telemedicine liability risks and damages." It is not yet clear whether dedicated telemedicine captive insurers exist.
The CICR September feature also covers the U.S. Internal Revenue Service (IRS) shifting its focus to its large taxpayer audit program. Tom Jones of law firm McDermott Will & Emery said the IRS has announced a campaign targeting captive insurers, and he explained its impact on newly developing captive insurers and their owners.
CICR Editor Emeritus Hugh Rosenbaum commented on the discussions at the 2016 Captive Insurance Companies Association (CICA) international conference regarding the captive regulatory principles developed by the International Association of Insurance Supervisors, and on the relationship between those principles and regulated captive insurers.
The article also discusses a future asset assessment technique—Own Risk and Solvency Assessment (ORSA), a formulized risk assessment model involving underwriting, credit and assets. A chart in the article compares Solvency II, Bermuda's version of ORSA rules and the National Association of Insurance Commissioners' ORSA regulatory framework. Although no captive insurer has yet achieved ORSA compliance, the questions and answers from CICA program participants in the article allow CICR readers to observe trends in the future regulatory regime for captive insurers.
Members of the tax department of law firm Sutherland Asbill & Brennan LLP discussed the details and significance of a recent ruling by the New York State tax appeals tribunal in litigation over whether captive insurer premiums may lawfully reduce the business franchise tax, involving companies including Stewart's Shops and its captive insurer—Black Ridge Insurance Company.
The September feature also includes a fascinating historical retrospective by Hawaii attorney Gerald Yoshida on Hawaii becoming a captive domicile 30 years ago. After passing enabling legislation in 1986 that took effect in July 1987, Hawaii became the fifth captive domicile in the United States.
This month's CICR feature also mentions Rosenbaum's "Thoughts on Brexit," and an article by Don Riggin discussing the use of net cash flow as a way to measure captive insurer value.
Source: Captive Review