Vermont Business Magazine Earlier this week, Vermont State Officials announced the formation of Vermont’s First Affiliated Reinsurance Company (ARC) by MAPFRE RE, a large global reinsurance company based in Madrid, Spain. Primmer Piper Eggleston & Cramer (PPE&C) attorneys Ralphine O’Rourke and Jesse Crary are the advising counsel to MAPFRE RE.
On July 1, 2018, Vermont officially passed legislation establishing this new type of captive which allows the formation of reinsurance affiliates onshore, and in so doing, avoids the Base Erosion and Anti-Abuse Tax (BEAT) that would otherwise apply to offshore reinsurance placements. By building on its experience with traditional captives and special purpose financial insurance companies, Vermont’s new option provides the flexibility found in captive regulation with the recognition that comes to companies complying with traditional insurance company accreditation standards.
Edward Perez De Lema, CEO of MAPFRE RE was amazed at the collaboration that took place to make this all happen. “We are extremely grateful to Vermont’s captive insurance community, regulators, and legislators for working together in a bipartisan fashion to address a pressing insurance industry need and pass the Affiliated Reinsurance Company Legislation.” He said, “Today is a great day for MAPFRE RE, and I hope it is a great day for Vermont as well.”
Ralphine O’Rourke Esq., a shareholder of PPE&C and former colleague of Michael S. Sher, Vice President and Deputy General Counsel of MAPFRE RE U.S.A. Corp. commented: “We’re delighted to be able to connect global reinsurer MAPFRE RE with a Vermont solution and be instrumental in creating the first Affiliated Reinsurance Company.”
Since filing the first captive in 1982, PPE&C has maintained its place as the leading law firm representing captives in Vermont and other domiciles. In the large the part the firm’s success is due to the collaboration between the team of attorneys and the Government Relations group. Today, the Government Relations group continues to play a pivotal role in the Vermont Captive Insurance Association and helped to develop the new ARC law.
Jesse Crary Esq., a shareholder, and director at PPE&C commented on the significance of the day: "Establishment of the ARC law is yet another example of what makes Vermont a national and worldwide leader in the captive insurance industry. Thanks to the dedication and expertise of Vermont’s regulators and industry experts, we were able to offer MAPFRE RE a straight-forward and efficient solution to a complex problem facing many US insurers reinsuring abroad.
About Primmer Piper Eggleston & Cramer PC
Primmer Piper Eggleston & Cramer PC is a New England-based law firm focused on meeting the legal needs of businesses, institutions, and organizations throughout the region and across state or national borders. The firm offers deep expertise in a wide range of legal services in all seven of its offices located in Vermont, New Hampshire, Vermont and Washington, D.C. To learn more visit www.primmer.com.
About Jesse Crary
Jesse concentrates his practice on the corporate, regulatory and transactional aspects of captive insurance. He has extensive experience advising pure and group captive insurance companies, special purpose financial insurers and risk retention groups in all aspects of formation, licensure, ongoing operation and regulatory compliance. Jesse’s well-established transactional practice includes advising clients on redomestications, reinsurance agreements, mergers, mutualizations, reciprocal conversions, dissolutions and insolvency proceedings. Jesse is also a specialist and leading attorney in the area of group medical stop loss captives combining the administration of employee benefit plans with access to captive medical stop loss coverage. Jesse is on the faculty of the International Center for Captive Insurance Education where he teaches a course on Captive Board Governance.
About Ralphine O’Rourke
Ralphine provides counsel to companies and their owners on transactional matters including mergers and acquisitions, complex financings and equity issuances. Ralphine frequently advises financial institutions on commercial lending transactions and regulatory compliance. She also handles corporate formation, regulatory compliance and transactional matters for the captive insurance practice. In addition, privately-held companies turn to her for assistance with Operating and Shareholder Agreements, business succession planning, software licensing, real estate matters and in connection with a wide range of other commercial transactions.
About MAPFRE RE
MAPFRE RE, Compañía de Reaseguros S.A. is the 17th largest reinsurer in the world, with more than $4.8 billion in gross written premiums and more than $253 million in net earnings as of December 31, 2017. MAPFRE RE has 386 employees and 19 offices around the world. MAPFRE Re is part of the MAPFRE Group, a global insurance company with a worldwide presence. MAPFRE is the benchmark insurer in the Spanish market and the largest Spanish multinational insurance group in the world. The company is the main multinational insurer in Latin America and is among the Top 5 largest Non-Life European insurers by premium volume. MAPFRE employs more than 36,000 professionals globally and in 2017, MAPFRE’s revenues surpassed $34 billion, and net earnings were above $850 million. In the U.S., MAPFRE Insurance serves policyholders in 14 states across the United States, including Vermont, through a network of more than 5,000 independent agents and brokers. MAPFRE Insurance is the 19th largest provider of personal automobile insurance and the 20th largest personal lines insurer in the United States. MAPFRE Insurance is also the largest private passenger automobile insurer, homeowners’ insurer and commercial automobile insurer in Massachusetts. MAPFRE Insurance provides a full range of insurance products, including coverage for automobiles, homes, motorcycles, watercraft and business. MAPFRE, MAPFRE RE, and MAPFRE Insurance are rated A (Excellent) by A.M. Best Company.
Source: Primmer Piper Eggleston & Cramer