Vermont Business Magazine In this A.M.BestTV episode from the Vermont Captive Insurance Association (VCIA) Conference in Burlington, VT, two insurance industry regulators discuss their handling of risk retention group (RRG) failures, as well as what issues arise in the oversight of agency captives. The captive industry's leading annual conference is held this week at the Sheraton Hotel Burlington. Vermont is the top domestic domicile for captive insurance companies.
“Unfortunately, in the District of Columbia, there are currently two RRGs in liquidation,” said Dana Sheppard, associate commissioner, District of Columbia Department of Insurance, Securities & Banking. “Both companies are sponsored by managing general agents (MGA); and although for approximately 10 years, both wrote business successfully, they encountered problems in the past couple of years. The market got very soft and pricing became difficult, so my department had to liquidate them.”
David Provost, deputy commissioner, Vermont Captive Insurance Division, explained how the same problem arose with RRGs in Vermont.
“Vermont’s two liquidated RRGs were also MGA-controlled. This fact has prompted our regulators to be very cognizant of what is occurring in RRGs,” said Provost.
In the episode, the two regulators also speak about agency captives and how the agents need to be aligned with the policyholders in order to avoid solvency issues.
For full video coverage of the VCIA conference, including exclusive executive interviews, visit www.ambest.tv/vcia17.
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