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The primary source of global captive news and analysis 27 May 2020 - Issue 199

Work in progress Work is underway to boost captive growth in Hong Kong but will updated legislation be enough to draw in new captives?

Barbados Insight CIC Services vs IRS Emerging Talent Justin Cole of DGM Financial Sean King of CIC Services discusses Mike Scott

Group discusses the current the firm’s upcoming case against Assistant vice president

captive climate in the IRS in the Supreme Court Global Captive Management

Captive Insurance Times

Issue 199

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1349PCP_Captive Review_20200211.indd 1 2/12/20 12:09 PM Contents

News Focus page 7 In this issue Barbados Insight Justin Cole of DGM Financial Group discusses the current captive climate in Barbados, new regulation, and what the industry can expect to see over the next 12 months page 13

Hong Kong Outlook Work is underway to boost captive insurance market growth in Hong Kong but will China’s Belt and Road Initiative and new legislative changes be enough to draw in new captives to the region? page 16

CIC Services vs IRS

Sean King of CIC Services discusses the firm’s upcoming case against the IRS in the Supreme Court, what a win would mean for the industry, and the support they are receiving page 28

Emerging Talent Industry Appointments The latest comings and goings in the captive Mike Scott, assistant vice president, Global Captive Management insurance industry page 25 page 31

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Babel Cover begins testing for digital bicycle insurance

Babel Cover, a technology startup, has started development for its range of digital first inter-connected financial services products, following its announcement for the project in A.M. Best affirms Lion Re ratings December last year.

A.M. Best has upgraded the financial strength A.M. Best explained: “The company continues As a first phase, it has released a fully digital insur- rating to A (Excellent) from A- (Excellent) and to support ASSA Tenedora’s strategy while ance product with the Maltese insurer Atlas and the long-term issuer credit rating to “a” from producing positive bottom-line results amid emerging technology firm Piprate to insure “a-” of Lion Reinsurance Company Limited (Lion healthy prospects for growth.” bicycles of competitive cyclists, triathletes and Re), which is based in . The outlook of commuters of Malta. these credit ratings remains stable. Lion Re is Additionally, it expects Lion Re to con- a subsidiary of ASSA Compañía Tenedora S.A. tinue playing an important role in ASSA The intention of the pilot is to perform live and (ASSA Tenedora) and is owned ultimately by Tenedora’s strategy, as it consolidates controlled product and technology testing laying Grupo ASSA, S.A. (Grupo ASSA), a financial ser- operations in new regions by providing rein- the framework for release of new products and vices holding company publicly traded on the surance capacity while maintaining its capital more countries. Panama Stock Exchange. base expansion. According to Stuart King, founder and CEO A.M. Best stated that these ratings reflect Lion Lion Re consistently reviews its underwriting of Babel Cover, buyers of insurance will ulti- Re’s balance sheet strength which is catego- guidelines to improve the performance of busi- mately benefit by having a fully digital rised as strong, as well as its adequate operating ness segments that are deviating from targets. product that offers more transparency, own- performance, neutral business profile and Investment income, based upon a more con- ership and oversight of the they appropriate enterprise risk management.The servative strategy, continues to support Lion Re’s purchase and the investments underpinning the rating firm highlighted that these ratings also results; however, the company is not dependent premiums collected. reflect Lion Re’s continued “adequate operating on this revenue to achieve positive bottom-line performance” resulting from its “affiliated insur- results, according to the rating company. King also noted that insurance provides an essen- ance companies in the region and from new tial social and economic role and the current strategic business alliances, strong risk-adjusted A.M Best outlined that factors that could lead to business model underpinning the deployment capitalisation”, which is measured by Best’s an upgrade of the ratings or positive outlooks of insurance capital to risk is not overly efficient Capital Adequacy Ratio (BCAR), and its affilia- for Lion Re included consistently positive bot- and is subject to an overwhelming amount of tion to Grupo ASSA, which provides synergies, tom-line results that can contribute to further non-added value cost. operating efficiencies and guarantee support. strengthening of its risk-adjusted capitalisation over the next few years while maintaining guar- “Babel Cover’s proposed risk financ- Lion Re is a Bermuda-based reinsurer assum- antee support. ing model as supported by modern ing risks from ASSA Tenedora and affiliates for technologies will ultimately lead to individu- property, liability, marine, life, health and mis- However, factors that could lead to negative alised insurance and cost savings. Babel Cover cellaneous businesses. The company provides rating action include a material loss of capital, proposes to return savings to customers in the reinsurance as part of the group’s retrocession which leads to a reduced level of risk-adjusted form of rewards to build greater loyalty and cover with a geographical exposure to Central capitalisation that does not support its ratings, trust between buyers and sellers of insurance,” America’s insurance market. and diminished strategic importance. ■ added King. ■

7 www.captiveinsurancetimes.com News Focus

Cayman sees positive Q1

The Monetary Authority (CIMA) risks in North America and remains the leading to our roots in healthcare. Longevity growth is revealed that as of 31 March 2020 there were a domicile for healthcare captives, representing also consistent and though not material in terms total of 660 Class B, C and D insurance companies almost one-third of all the captives on the island. of license stats it is hugely impressive in terms and 25 insurance managers under the supervi- of premiums written. It would be remiss of me sion of the Division. As at 31 March 2020, medical malpractice liabil- not to consider the potential impact of COVID-19.” ity (MedMal) continues to be the largest primary Pure captives and group captives represented the line of business with approximately 26 percent “We see many of our clients being impacted from two main categories, with 283 and 125 compa- companies (re)insuring MedMal, and workers’ a liquidity and capacity perspective but what is nies, showing a slight increase in group captives compensation, the second largest with over 22 clear is that the captive remains a key strategic and while pure captives remain stable compared percent of companies assuming this risk. ally in their risk financing and risk mitigation con- to Q4 2019 figures of 283 and 123, respectively. versations. Our risk manager clients are getting Commenting on the Q1 figures, Adrian Lynch, far more air time with their C-suite and the cap- The Q1 results showed that 20 percent of the Insurance Managers Association of Cayman tive is being seen as a legitimate capacity creator total Class B, C, and D insurance companies vice-chair, said: “I am encouraged by the consist- within programmes seeking support.” were formed as segregated portfolio compa- ency of our results in Q1 in Cayman. Obviously nies, with over 600 segregated portfolios. There everything in life nowadays will have a pre and “Our pipeline for Cayman is strong and all the were a total of 780 insurance licensees under the post-COVID-19 lens. We must remember that Q1 portents are very positive in terms of growth supervision of the Insurance Supervision Division results will often contain the carryover from 2019 opportunities despite the anticipated losses as at 31 March 2020, of which 95 and 685 related efforts, however, they remain a reflection of the resulting from COVID-19. The knock-on effect to domestic and international insurance markets, hard work and innovative strategies of many of here will be a tightening in capacity thus respectively. This figure has increased from 764 Cayman’s managers.” expanding the captive conversation. I expect in Q4 2019. Q2 will be equally as solid, we may see a dip in He continued: “I am particularly impressed by the Q3 due to the COVID-19 effect and I imagine Q4 The Cayman Islands international insurance growth in non-healthcare stats again reflective of will likely be the busiest we have seen in years,” industry consists mainly of companies insuring diversification in our market while remaining true he added. ■

8 images by andy_morehouse/shutterstock.com www.captiveinsurancetimes.com CaptivesNews Focus Post-COVID-19

Investigation launched into Willis and Aon merger

Bragar Eagel & Squire (BES) has launched an investigation into whether the board members of Willis Towers Watson breached fiduciary duties or violated the federal securities laws in connec- tion with the company’s proposed merger with Aon. On 9 March this year, Willis announced it had signed an agreement to be acquired by Aon for approximately $30 billion.

As part of the merger agreement, Willis Towers Watson’s stockholders will receive 1.08 shares of Aon common stock for each share of Willis Towers PARIMA calls on insurance market to work Watson common stock owned. The deal, which is together in response to COVID-19 scheduled to close in the first half of 2021, would see the combination of two of the world’s largest The Pan-Asia Risk and Insurance Management stress, and highlighted that they are not in insurance brokers. Association (PARIMA) has requested for the favour of regulators imposing retroactive cov- insurers and brokers across the Asia Pacific erage of claims that were not envisaged within BES stated that they are concerned that WTW’s region to come together with flexibility and contracts as this could create material solvency board of directors “oversaw an unfair process and partnership for businesses in the region to sur- risks for insurers. ultimately agreed to an inadequate deal price”. vive as a result of the COVID-19 pandemic. “Regulators enforcing retrospective changes The stockholder rights law firm said they are In its message, PARIMA stated: “In an unprece- would jeopardise contract certainty and erode investigating all relevant aspects of the deal and dented crisis, many companies are under great the trust needed to build a long term and col- “are committed to securing the best result possi- pressure and for some, it may be a question of laborative relationship, a relationship that will ble for WTW’s stockholders”. survival.” be essential for business in recovering from the pandemic,” PARIMA explained. In light of the current COVID-19 pandemic, Aon’s PARIMA suggested insurers and intermediaries CEO Greg Case sent a letter to employees address- should endeavour to treat customers fairly and The board is also “strongly advocating for the ing how the pandemic has affected the firm. grant flexibility to business customers, as well creation of national/regional insurance pools as individual consumers when reasonable and for future pandemic risks”. Case outlined in his letter that the combi- practical across both the timing and extent of nation with Willis Towers Watson “will be a premium payments and claims negotiations. PARIMA noted that national/regional pools positive catalyst that enables us to accelerate have been previously useful in responding to innovation on behalf of clients. This all-stock “The support of the insurance industry is going other severe and widespread risks, such as ter- combination requires no financing and our to be critical for businesses, and it is paramount rorism, and could prove to be equally relevant intent to complete it creates no incremental that businesses have continued access to insur- in dealing with a global pandemic exposure. financial burden”. ance and are kept well informed as we navigate these uncertain times,” the association added. The association said it is prepared to provide an Willis Towers Watson declined to comment, while expert view from risk and insurance managers Aon is yet to respond to a request for comment. ■ PARIMA recognised that insurers are also under to support this cause. ■

9 www.captiveinsurancetimes.com News Focus

Airmic calls for change in approach to insurers’ pandemic response

Airmic has urged the insurance market to choose It also called for the avoidance of last-minute and The association highlighted that they must be a more responsible position on the COVID- poorly communicated changes in underwriting embedded in broader national and international 19 pandemic or the sector will risk long-term policy, including coverage limits and exclusions; risk strategies and should themselves be pooled damage to trust and reputation and the loss constructive dialogue in wording disputes and a to ensure the efficient use of capital. of customers. willingness to look favourably on grey are claims; flexibility in cover and rebates for reduced risk A collaborative approach, such as joining up the The UK association explained that as many cor- exposure relevant to current trading conditions public, private and academic sectors may be the porates are facing the “existential” outcomes from and business operations; and recognition of the only long-term option, according to Airmic. global governments’ lockdown measures and cumulative impact of the harsh market and pan- “recession likely to follow”, it expects brokers and demic on renewals. The association noted that it is currently working insurers to demonstrate fairness and flexibility with industry and government bodies to explore with regards to claims and renewals. Additionally, the association asked for a commit- how to turn this into a reality. ment to avoid COVID-19 exclusions on directors Airmic said: “The harsh market is already strain- and officers policies; business interruption cov- Airmic CEO John Ludlow commented: “The insur- ing relations with many corporate clients, ers that are fit for modern business risk profiles, ance industry is at a critical juncture. Member and insurers’ rigid interpretation of wording which may include the increased use of para- surveys suggest the hardening market is already regarding the pandemic could accelerate metric tools to protect cash flows; and greater forcing businesses to look at alternative transfer this deterioration.” collaboration and communication between busi- options, and an ill-judged response to the pan- nesses, insurers and brokers to allow innovation demic could prove the trigger.” However, Airmic stated that insurers have a and opportunity to emerge from the crisis. choice, “they can either interpret ambiguous con- “We understand insurers are under stress but tract wordings with their balance sheet in mind, Similar to PARIMA’s call to the insurance market, it is in the interests of all parties that we work or they can act as partners to long-standing cus- Airmic is also looking beyond the COVID-19 pan- together openly, constructively and collabora- tomers who seek business protection.” demic as the association supports the creation tively. For years, insurers have said they want of national catastrophic pooling and reinsurance to be business partners with our members. “All parties will benefit from a partnership mechanisms, such as the existing UK pools for Now is the chance to put words into practice,” approach to the current crisis”. terrorism and flood. he concluded. ■

10 images by vk_studio/shutterstock.com www.captiveinsurancetimes.com News Focus

Nissan’s captive issued ‘excellent’ ratings by A.M. Best

A.M. Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” of Nissan Global Reinsurance (NGRe), based in Hamilton, Bermuda. The outlook of these credit ratings remains stable.

A.M. Best stated that the ratings reflect NGRe’s balance sheet strength, which they categorised as very strong, as well as its adequate operating performance, neutral business profile and appro- FERMA launches taskforce to tackle priate enterprise risk management. business interruption risks NGRe is a single-parent captive of Nissan Motor The Federation of European Risk Management Meanwhile, FERMA also argued that the impact Company. In its role as a single-parent captive, Associations (FERMA) has created a taskforce to of catastrophe events, like the current pan- NGRe provides Nissan with a host of insurance create proposals to address the issue of busi- demic, are beyond the resources of the private coverages in the US and abroad, including ness interruption coverage for catastrophic insurance industry and enterprise risk manage- extending service contracts, product liability and risks. The aim of the taskforce is to support ment alone. inland marine. the creation of economies that are resilient in the face of systemic and catastrophe risks, The absence of business interruption cover As a member of the Nissan family of companies, explained Dirk Wegener, president of FERMA. without a requirement for physical damage, or NGRe benefits from the group’s proprietary data non-damage business interruption, is a criti- warehouse, extensive risk management practices The task force, made up of senior risk manag- cal issue, FERMA explained. It affects all sizes and loss control programmes. ers from FERMA members, plans to publish its of business, but especially small and medium initial results by the end of May. enterprises. The rating affirmations reflect NGRe’s steady growth in surplus driven by consistent premium FERMA and the member associations want to FERMA identified that several European coun- growth and favourable profitability over the past open a dialogue with all relevant stakeholders, tries have existing public-private partnerships 10 years. including EU institutions, insurers and brokers, to cover extraordinary risks. and government bodies. The rating company suggested that NGRe The landscape is diverse and, inevitably, each maintains a large portion of investments in Additionally, it was noted that FERMA has called has strengths and weaknesses. The taskforce asset-backed securities (ABS), which produce for a discussion among these stakeholders to suggested it will be essential to avoid easy significant monthly income that contributes to create a holistic solution that provides cover for solutions. strong operating cash flows. non-damage business interruption for all types of catastrophe risks, not just pandemic. Wegener added: “Any catastrophe mecha- “Despite the substantial proportional size of the nism for business interruption must be able to underlying loans, these ABS instruments are “We intend to draw on that expertise to make respond to various types of disaster, address considered to be of high credit quality and have concrete proposals to form the basis of discus- the complexities of catastrophes and avoid the performed in accordance with expectations,” A.M. sions with stakeholders,” Wegener said. pitfalls of existing schemes.” ■ Best added. ■

11 images by frimufilms/shutterstock.com www.captiveinsurancetimes.com C

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K Barbados Insight - Maria Ward-Brennan reports

A mature island

Justin Cole of DGM What does the captive market look like in Barbados?

Financial Group discusses Barbados is a mature captive market that has been in existence since the the current captive early 1980s.

climate in Barbados, new As a well-known domicile, it continues to experience steady annual regulation, and what the growth with a net gain of 18 new insurance companies in 2019, bringing industry can expect to see the total number of insurance companies to 294 at the end of 2019. This type of growth has been very consistent and we expect it to continue into over the next 12 months the future.

13 images by frimufilms/shutterstock.com www.captiveinsurancetimes.com Barbados Insight

What are the biggest challenges/ Is there any planned legislation Barbados also has DTAs with Panama, Venezuela opportunities for the captive insur- for captives in Barbados? and Cuba, and is actively working to expand ance industry in Barbados? our treaty network in order to create additional Barbados’ new Insurance (Amendment) Act now opportunities worldwide. The Organisation for Economic Co-operation and features two classes of insurance licence: Class 1 Development (OECD) inclusive framework on for companies insuring related-party risk which base erosion and profit shifting (BEPS) brought are taxed at 0 percent and pay a licence fee of What changes do you see about numerous challenges as the country had USD 12,500; and Class 2 for companies that for Barbados’ captive market to take a fresh look at its insurance legislation insure and/or reinsure third party risk which is over the next 12 months? to ensure that all ring-fencing was removed and taxed at a rate of 2 percent on taxable income Barbados remained compliant. Barbados was and a licence fee. Barbados legislation also allows Early signs indicate that Barbados’ captive market able to completely revamp legislation to ensure for separate account structures, segregated cell will continue to grow over the next 12 months compliance while remaining an attractive cap- companies and incorporated cell companies. as there continues to be a lot of interest in estab- tive domicile. These OECD efforts, specifically lishing captives, likely due to the hardening as they relate to economic substance, have insurance market which always drives interest also been greeted as a great opportunity for Do you currently see any new in captives. The decision to establish a captive is Barbados when compared to competing dom- business coming to Barbados usually the result of long-term planning, rather iciles. Barbados has always been a jurisdiction from Latin America or any other than a short-term reaction, therefore, I don’t think of substance and has a highly educated local countries that are in the DTA? that the COVID-19 pandemic will have a major workforce within the insurance sector. The impact on the captive sector in Barbados. The country relies far less on foreign profession- Yes, Latin America is a rapidly growing segment Financial Services Commission, which is Barbados’ als than other competing jurisdictions. With of the Barbados captive industry and Barbados’ insurance regulator, has seamlessly transitioned these new requirements levelling the playing efforts to develop a double taxation agreement to working remotely and continues to function field across all jurisdictions, Barbados believes (DTA) with Mexico in this regard has paid off, effectively. Likewise, the various captive man- that this has created a real opportunity and coupled with our marketing initiatives to make agement teams have done the same allowing competitive advantage. inroads into the Latin American marketplace. business to continue uninterrupted. ■

“Early signs indicate that Barbados’ captive market will continue to grow over the next 12 months as there continues to be a lot of interest in establishing captives, likely due to the hardening insurance market”

Justin Cole Vice president, management services DGM Financial Group

14 www.captiveinsurancetimes.com B++ Good Hong Kong Outlook - By Maria Ward-Brennan

Work in progress

Work is underway to boost captive insurance market growth in Hong Kong but will China’s Belt and Road Initiative and new legislative changes be enough to draw in new captives to the region?

Hong Kong, officially the Hong Kong Special million and total underwriting profit was Rayner explains that Hong Kong has recently Administrative Region of the People’s Republic HK$396 million. expanded its captive law to make itself more of China (HKSAR), is a metropolitan area and spe- accessible to infrastructure companies in its cial administrative region of China in the eastern The four captives include CGN Captive; CNOOC ‘China’s Belt and Road Initiative’ (BRI). However, Pearl River Delta by the South China Sea. With a Insurance, Shanghai Electric Insurance; and Sinopec he notes that Hong Kong is still at the stage of population of over seven million people, Hong Insurance. Although there is slow progress, work building its reputation as a captive domicile and Kong is among the most densely populated areas is being done to try and accelerate the speed of growing awareness of the captive insurance con- of the world. It is also a major international finan- growth within the Hong Kong captive market. cept among Chinese corporations. cial centre and its currency, the Hong Kong dollar, is the eighth most traded in the world. Hong James Rayner, global relationship leader at China’s special region Kong’s captive insurance market is still making Crawford & Company, says: “Hong Kong has ambi- slow and steady progress. tions to be the domicile of choice for Chinese China has been pushing for Hong Kong to captives, with the Hong Kong Financial Services become a viable captive domicile for the region. In 2019, total gross written premiums for Department Council targeting 50 licensed cap- The BRI, which was adopted by the Chinese its four domiciled captives was HK$1,355 tives by 2025.” government in 2013, is a multibillion-dollar

16 images by weerasak_saeku/shutterstock.com www.captiveinsurancetimes.com Hong Kong Outlook

initiative that involves infrastructure devel- Time to compete Commission (CBIRC) was established following opment and investments in 71 countries and the merger of the CIRC and the China Banking international organisations. Like all captives domiciles around the world, Regulatory Commission, according to To. competition is a key challenge for them all and Edward Wu, head of captive and mutual practice as Rayner highlights this is no different for Hong Relations between people in Hong Kong and in China at Willis Towers Watson, explains that the Kong. Rayner notes that Hong Kong faces stiff mainland China have been relatively tense initiative aims to improve transnational connec- regional competition for captive business, as well since the early 2000s. Hong Kong made world tions along the old silk road and the maritime as from very established captive domiciles like headlines for months across 2019 as many trade route connecting China and Europe. Bermuda and . Hongkongers took to the streets and protested.

Wu adds: “This boosts the insurance sector and Wu also highlights that Hong Kong is facing Rayner highlights that these upticks remain to be generates the demand of centrally managing the fierce competition among other Asia captive seen whether these anti-mainland protests will large enterprise’s global insurance programme domiciles, such as , which is the top reignite and if this will dent Hong Kong’s stand- using captive.” Asian domicile with the biggest number of cap- ing with Chinese firms. tives licensed by the end of 2019, while Labuan is As China’s state-owned enterprises expand over- also taking a very proactive approach to promot- Also weighing in, Wu explains that the recent seas, Wu explains that they are showing interest ing itself as a favourable captive domicile in Asia. unstable political environment in Hong Kong in achieving the best risk management prac- society also raises Mainland enterprises’ concern tice, including consolidated insurance buying Rayner notes: “Each has a more developed about workplace safety and business continuity. through captive insurance programmes. captive service ecosystem than Hong Kong’s, and they continue to dedicate resources to “However, in mainland China, high market admis- building relationships and recognition in the Creating the legal tools sion thresholds and regulatory standards that are Chinese market.” similar with general commercial insurance com- As one of Asia’s growing captive domiciles, Hong panies limit the candidate of captive applicants to He states that in uncertain times, these dom- Kong provides favourable regulations to captives, super-large central enterprises, state-owned enter- iciles’ deeper experience may be attractive to such as lower minimum capital requirements, prises and very few private enterprises,” Wu states. companies forming their first captives. Hong lower solvency requirements, the permission Kong’s political and economic ties to the of outsourcing, tax concession and other pol- Hong Kong has relatively lower capital require- mainland should, in theory, stand it in good icies differentiated with general commercial ments, which encourages some enterprises stead to capitalise from an uptick in Chinese insurance companies. that are not large, to set up their captives in captive formations. Hong Kong. Wu says: “It lowers the total cost of running a cap- Henry To, chairman Hong Kong, China Guy tive. The friendly captive regime and incentive Wu highlights: “To actively respond to the Carpenter, explains that at the beginning in mid- policies are considerable attractions for main- country’s ‘going-out’ strategy, many Chinese 2017, captive development in Hong Kong slowed land enterprises.” enterprises are using Hong Kong as a platform when the chairman of the China Insurance for global market expansion.” Regulatory Commission (CIRC) stepped down. Addressing any planned legislation for Hong Kong, Mike Campbell-Pitt, chief technical officer, “Hong Kong’s insurance regulator is trying to build Applications to establish captives in Hong Kong Asia, Crawford & Company, said: “In March, the a risk management centre under BRI and a popu- from China enterprises have “practically come Hong Kong Insurance Authority (IA) amended its lar captive domicile to help mainland companies to a halt”. However, discussions regarding cap- captive laws through the Insurance (Amendment) better manage their offshore business and risks,” tives were re-activated beginning in mid-2018 Bill 2020, which expands the scope of coverage he adds. when the China Banking-Insurance Regulatory which can be written by captives in Hong Kong.

17 www.captiveinsurancetimes.com Hong Kong Outlook

The bill aims to provide a new regulatory regime An amendment bill seeking to expand the scope He continues: “Large corporate clients were for the ILS business and expand the scope of of insurable risks for captive insurers to cover, for already seeing a hardening of the market, in insurable risks of captive insurers set up in example, the underwriting of risks of bodies cor- terms of premiums and reduced capacity for cer- Hong Kong. According to the current Insurance porate within the group, and the underwriting tain risks, business types or geographical regions Ordinance (Chapter 41), a captive is restricted to of risks in proportion to the controls over the with higher loss exposures. This should bring write the insurance and reinsurance of risks of relevant body corporate by the group, is also increased activity in the captive sector.” below companies: awaiting scrutiny by Legislative Council of Hong Kong, according to Lam. But with a lot of the world currently in lockdown i. a company (first company) which due to the COVID-19 pandemic, will this put on belongs to the relevant compa- He suggests by expanding the scope of insurable hold the work being done to boost the captive ny’s group of companies risks by captive insurers, multinationals will be market in Hong Kong? able to implement their global risk management ii. a company (second company) in respect strategy more effectively to cover their projects. Lam suggests that COVID-19 highlights the of which the relevant company or the importance of risk management, sufficient capac- first company holds, or is entitled to The IA has also put forward an amendment bill to ity and ability to absorb the potentially massive control the exercise of, not less than cut by half the profits tax rate for insurers under- losses that a pandemic can threaten. “This 20 percent but not more than 50 per- writing marine and speciality (e.g. catastrophe, will instil stronger belief in risk management cent of the voting power at any general political, terrorism, war and credit) risks. The tax solutions to cope with the change in the risk meeting of the second company concession is also applicable to insurance bro- landscape for multinationals,” he adds. ker companies placing such risks to (re)insurers iii. a company (third company) where in Hong Kong. Campbell-Pitt suggests COVID-19 losses are the third company is a subsidi- likely to cause capacity to dry up and prices to ary of the second company The IA will be seeking to build up the insur- rise in affected lines, presenting opportunities ance-linked securities (ILS) market in Hong Kong for the captive industry to prove its value. He “The key objective was to ensure Hong Kong to enable the transfer of catastrophic risks to the explains: “It is unlikely, however, a company is positioned to capitalise on captive busi- capital market. would form a captive specifically to insure ness that may flow from China’s huge BRI. pandemic risks due to the difficulty modelling Large companies that are expanding globally “In this respect, an amendment bill was gazetted these risks and the potentially very high cost will need to find a home for a range of spe- in March 2020 for the authorisation of special of claims.” ciality risks that may be difficult to insure in purpose insurers (SPI) as a platform for the issu- China, such as credit, surety and political risks,” ance of ILS that caters specifically for underlying Finally, To states that the commitment to pro- Campbell-Pitt divulges. risks in BRI and the Greater Bay Area,” Lam adds. mote Hong Kong as a captive centre will likely not be affected by the COVID-19 pandemic. Simon Lam, executive director (general busi- ness) at Hong Kong IA, outlines the steps they Will the captive dream To says: “However, the pandemic will likely cause are taking “to promote the ecosystem that is remain in isolation? delays in captive development and establish- congenial to the setting up and operation of ment in the next 12 months. We expect new captive insurers.” Campbell-Pitt reflects that over the next 12 captives to be established in Hong Kong, but months the hardening market that the insurance again, COVID-19 will delay the process.” He explains that the reduced corporate tax rate sector is currently experiencing “should sharpen of 8.25 percent has recently been extended to Chinese companies’ attention on captives as an At this moment, there is an emphasis on main- onshore risks underwritten by captive insurers alternative form of risk transfer, which may lead taining a healthy and stable insurance market in since 2018/19. to formations in Hong Kong”. Hong Kong, To concludes. ■

18 www.captiveinsurancetimes.com

IRS Letter

The letter in question Phil Karter, Scot Kirkpatrick and Patrick McCann of Chamberlain Hrdlicka discuss the IRS’ letter, which raises more questions about captive audits in an already certain time

One cannot turn on a television these days without news reporters, commentators and even advertisers constantly reminding us of the unprecedented uncertainty in which we now all find ourselves. For taxpayers relying on the use of captive property and casualty insurance policies purchased from Section 831(b) insurance compa- nies or micro-captives (some of which might even provide coverage for the business interruptions occurring as a result of the current crisis), the Internal Revenue Service’s (IRS) recent issuance of Letter 6336 gives rise to another uncertainty that can add to the financial pressure businesses are facing, the risk of a costly and intrusive tax audit.

20 images by blackmac/shutterstock.com www.captiveinsurancetimes.com IRS Letter

and disclosed pursuant to Notice 2016-66 and captive property and casualty insurance poli- Notice 2017-08”. cies as a component of their risk management strategy? (ii) If not, when did the taxpayers last On 31 January 2020, in IR-2020-26, the IRS participate in a captive insurance transaction? announced the establishment of 12 new exam- (iii) How structurally and operationally sound “The irony is that the ination teams to assist in the audits of what it is (or was) the captive insurance programme described as abusive small captive insurance utilised by the taxpayers? Finally, (iv) do the tax- recipients of the letter transactions. The information release reported payers plan to file qualified amended returns that “[e]xaminations impacting micro-captive disclaiming any tax benefits related to the captive were identified only insurance transactions of several thousand tax- insurance transactions? as a result of their payers will be opened by these teams in the coming months. Potential civil outcomes can Omitted from a discussion of these consider- previous compliance include full disallowance of claimed captive ations are taxpayers that have already been insurance deductions, the inclusion of income audited or are under audit for their participation with Notice 2016- by the captive entity and imposition of all appli- cable penalties.” Letter 6336 appears to be the 66 and their filing of first step to opening those examinations as a tool reportable transaction to help the IRS identify and prioritise its targets for examination. The letter requires a statement disclosure statements ” made under penalties of perjury regarding the last year the taxpayer claimed deductions or “Letter 6336 has other tax benefits related to small captive insur- ance transactions. left many recipient taxpayers and Phil Karter Letter 6336 stipulated an initial response date of Shareholder 4 May 2020, which was extended an additional their professional Chamberlain Hrdlicka 30 days in response to the ongoing pandemic caused by COVID-19. It does not require a advisors struggling response or impose a penalty for failing to On 20 March 2020, only one week after US respond. However, the letter notes that the IRS to determine how President Trump issued his proclamation on will “take [the taxpayer’s] actions in response to best respond or declaring a national emergency concerning to [Letter 6336] into account when considering the COVID-19 outbreak, the IRS issued letters to future compliance activity related to [the taxpay- even whether to tens of thousands of taxpayers seeking informa- er’s] micro-captive insurance arrangement.” The tion about their participation in micro-captive practical implication of that statement is left to respond at all” insurance transactions. The irony is that the the reader’s imagination. recipients of the letter were identified only as a result of their previous compliance with Notice Letter 6336 has left many recipient taxpayers and 2016-66 and their filing of reportable transaction their professional advisors struggling to deter- disclosure statements (Forms 8886), with the let- mine how to best respond or even whether to ter stating, “We have information that you’ve respond at all. The decision will likely depend Scot Kirkpatrick taken a deduction or other tax benefit related to on the answer to a number of questions, such Shareholder micro-captive insurance on a prior year tax return as: (i) Do the taxpayers continue to rely on Chamberlain Hrdlicka

21 www.captiveinsurancetimes.com IRS Letter

in a micro-captive transaction, including those So let’s review the considerations that might whose cases have gone to IRS Appeals or even bear on your response, or whether you should the US Tax Court. Although Letter 6336 was sent respond. indiscriminately to both unaudited and audited micro-captive taxpayers, there is little to for For those taxpayers who last participated in “Responding to audited taxpayers to contemplate. Whether you the transaction and filed their tax returns on or respond or not should have no bearing on your before 15 April 2016, the statute of limitations the inquiry could situation, although a gentle reminder that “I’m has expired and there is no threat of any cap- already under audit” might mitigate further intru- tive related adjustments for those years. (Note be viewed by the siveness and preserve arguments that you have that there may be a limited exception that the IRS as a good faith fully complied in good faith with all IRS requests government tries to argue for captive insurance related to your captive insurance audit. For tax- companies domiciled in foreign jurisdictions and effort to cooperate, payers yet to be audited, Letter 6336 requests failed to file an protective filings related to their that if “you’re no longer claiming deductions or status as a foreign company.) Still, responding to but whether that is other tax benefits for any micro-captive insur- Letter 6336 may prevent the government from likely to translate ance transactions covered under Notice 2016-66 initiating an audit for later years that could con- on your Federal income tax returns, please notify tain some other non-captive insurance related into more lenient us by sending a letter to the address shown issues. above.” Read literally, it does not appear that a treatment if an response is required for any taxpayers who con- Taxpayers on an extension to file their 2016 tax tinue to purchase captive property and casualty return or who last participated in 2017 should audit is commenced insurance policies as part of their risk manage- think more carefully about whether or not to is unknowable” ment programme. The letter states that “[i]f you respond. The statute of limitations remains open continue to participate in a micro-captive insur- for those years and the government is free to ini- ance transaction covered under Notice 2016-66, tiate an audit and assert adjustments related to you must continue to disclose your participation their captive insurance transactions. However, Patrick McCann in the transaction.” The disclosure requirement is absent an immediate extension of the statute of Associate nothing new, as it is not imposed by Letter 6336, limitations, the government will have only a lim- Chamberlain Hrdlicka but rather by an ongoing obligation to report ited opportunity to complete an audit and may under Notice 2016-66. Therefore, any taxpayers prioritise taxpayers for whom more time remains transactions in 2018 or 2019. For them, there is who continue to rely on captive insurance as an before the expiration of the statute of limitations. sufficient time remaining on the applicable stat- alternative risk management strategy must con- By responding to Letter 6336, taxpayers in those ute of limitations for the government to initiate tinue to disclose that participation on Form 8886 circumstances may unwittingly make themselves an audit and assert adjustments within the lim- – Reportable Transaction Disclosure Statement a target for audit by sticking out from the crowd itation period. Responding to the inquiry could filed with their Federal income tax returns. and presenting a greater sense of urgency to be viewed by the IRS as a good faith effort to investigate, particularly if the claimed premium cooperate, but whether that is likely to translate What then was the objective of Letter 6336, deductions were large. The phrase “discretion is into more lenient treatment if an audit is com- given that a vast proportion of the recipients are the better part of valour” comes to mind for such menced is unknowable. Although a response already audited or are maintaining their captives taxpayers hoping that the statute of limitations to Letter 6336 may buy some goodwill with an currently and told they need not respond? The will run its course. auditor, for an issue being tightly controlled by answer seems to be that the letter is intended to IRS personnel above the audit level, one should prioritise the universe of unaudited micro-cap- The taxpayers facing the greatest uncertainty are not assume that compliance will have any bear- tive taxpayers as targets for future examination. those who last participated in captive insurance ing on the IRS’ decision whether to assert the 20

22 www.captiveinsurancetimes.com IRS Letter

percent or 40 percent penalty in a micro-captive insurance audit.

For those with significant time remaining on the statute of limitations, a separate question is whether to file qualified amended returns for open years foregoing the captive insurance premium deductions claimed on their original returns. By filing QARs, those taxpayers can elim- inate the risk of any accuracy-related penalties that might accompany an audit determination. Phil Karter In the course of a QAR analysis, taxpayers no Shareholder longer operating their captive should strongly Chamberlain Hrdlicka consider whether their former captive insurance structure will withstand an IRS challenge and potential judicial review. Even those with strong captive insurance programmes but who claimed only small premium deductions should consider a cost-benefit analysis that takes into account the cost of a potential audit defense of a captive insurance arrangement.

There is no point in winning the battle and losing the war if the cost to defend outweighs the bene- fits derived from the deduction originally claimed. Scot Kirkpatrick Shareholder Thus, in confronting what to do about Letter 6336 Chamberlain Hrdlicka and the possibility of filing QARs, taxpayers may benefit from an independent third-party review of their captive insurance arrangements to evalu- ate how well they might stand up to scrutiny and, assuming they do, whether that battle is worth fighting. On the other hand, if your captive is still operating and continues to serve a bona-fide risk mitigation purpose integral to your business, that is a battle likely to be well worth fighting.

IRS coercion efforts notwithstanding, where the arrangement is motivated by business rather than tax considerations, taxpayers who Patrick McCann are audited should not be reluctant to stand Associate their ground. ■ Chamberlain Hrdlicka

23 www.captiveinsurancetimes.com The World’s Leading Independent Captive Manager

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strategicrisks.com Emerging Talent

MikeAssistant vice Scott president Global Captive Management

“My background had been in auditing government and public sector entities when I was with PwC in Scotland, so the learning curve was steep”

Personal bio: I’m originally from Edinburgh, Scotland, and enjoying How did you end up in my second spell living and working in the Cayman Islands. I like to the captive industry? spend my spare time reading, playing Gaelic Football, working out at F45 and visiting the islands’ restaurants and beaches with my partner, Upon joining PwC Cayman, I was assigned to their baby son, and friends. insurance department and began working on a portfolio of captive insurance companies, per- Professional profile: I obtained an MA in English Literature and forming the audits of their financial statements. History from the University of Glasgow in 2008, and partially com- pleted a one-year MSc in Information Technology before leaving the My background had been in auditing govern- course early to take up full-time employment in 2009 – graduate ment and public sector entities when I was with jobs were hard to come by during the financial crisis. I qualified as a PwC in Scotland, so the learning curve was steep, Chartered Accountant with PwC in Edinburgh in 2012, shortly before but I found myself working in a great team of relocating to Cayman for the first time and then spent time working smart, dedicated people, and the training pro- in the not-for-profit and banking sectors back in Edinburgh before vided was excellent. I learned a lot about the returning to Cayman in 2016 to join Global Captive Management. captive industry in the two years that I worked there, which stood me in good stead when I was looking to return to Cayman a few years later, and the opportunity to join GCM arose.

25 www.captiveinsurancetimes.com Emerging Talent

What has been your highlight The clients of mine who are most committed to in the captive industry so far? the running of their captives have reaped the “The industry is a brilliant greatest rewards, retaining millions of dollars that Having the opportunity to travel widely for client would otherwise have been spent on commer- place to work for people and industry meetings with GCM. I’ve been for- cial coverage. Working with committed people, tunate enough to visit Mexico, Italy, Canada and pulling together in a fast-paced, ever-changing who are naturally Aruba, as well as various places in the US, in the environment makes the industry a great place course of my work. It’s always great to visit and to work. inquisitive and are explore new places, and the trips have given me committed to providing an opportunity to spend some time with my cli- ents in person and better understand how I can What are your aspirations for your great client service” help them. career in the captive industry?

I feel that I’ve progressed well in my first five years What advice do you have What/who have been your in the industry, and I’m looking forward to many for someone considering influences in the captive industry? more. GCM was recently acquired by Holmes a role in the industry? Murphy & Associates and we’re already enjoying Damian Pentney and his management team at the benefits and opportunities that that relation- The industry is a brilliant place to work for people PwC Cayman were responsible for bringing me ship brings. I’m active within the local industry who are naturally inquisitive and are committed into the industry in the first place and equipping association here in Cayman and, more recently, to providing great client service. It takes a whole me with the knowledge I needed to succeed early have taken on responsibility for regulatory com- team of service providers to successfully run a on. Since then, there are genuinely too many peo- pliance arrangements in our office, so I feel that captive; you’ll need to understand your role and ple to name – I deal with and learn from, a variety I have a lot of opportunities to continue to learn, then be diligent and organised in fulfilling it in of people from across the industry day in, day progress and provide the best possible service order for you – and your clients – to get the most out, including my clients, actuaries, attorneys, tax and advice to my clients. out of it. ■ advisors, regulators and my peers at other firms, through our local industry association. The man- agement team here at GCM are really supportive and are, collectively, an invaluable resource to me. “Mike Scott has excelled during the short time he has worked for GCM.

What is your impression Not only has he become technically proficient in of the industry? insurance accounting, but he has also developed strong

The industry is well-established and growing relationships with his clients building a solid foundation here in Cayman and elsewhere for good reason – of trust which is key to our role in the industry. firms are having to manage their risks ever more closely and, increasingly, it’s making sense for Furthermore, his willingness to adapt to the industry and take them to utilise captives, particularly in the current an active role in compliance shows he has a bright future ahead.” hard market. That said, the pace of regulatory change is quick and requires captive owners to Alanna Trundle, vice president, Global Captive Management be engaged and invested in their operation – the captive is a business in itself, after all.

26 www.captiveinsurancetimes.com CAPTIVE INSURANCE OVER 1,100 CAPTIVES LICENSED

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VTC001-20_Captive_Insurance_Times_Full_Page.indd 1 1/13/20 7:30 PM CIC Services vs IRS - Maria Ward-Brennan reports

Standing on the shoulders of giants

Sean King of CIC Services discusses the firm’s upcoming case against the IRS in the Supreme Court, what a win would mean for the industry, and the support they are receiving from the captive insurance industry throughout this legal process

What will your main points Supreme Court Legal Clinic of the George Mason further consideration and a decision regarding be for the Supreme Court Law School, and many captive insurance regula- whether or not an injunction should be issued. case against the IRS? tors who have supported us in the case. We are confident that we meet the standard for an injunction and that Notice 2016-66 would Our main point is that our legal challenge to the We have received a phalanx of industry support ultimately be enjoined by the district court. regulatory mandate illegally imposed upon tax- from Self-Insurance Institute of America (SIIA), What the IRS does from there is anyone’s guess, payers by Notice 2016-66 (in contravention of the the North Carolina Captive Insurance Association, but the IRS would at a minimum be precluded Administrative Procedures Act) is not an attempt the Captive Insurance Association, from enforcing the notice and may also be pre- to restrain the assessment or collection of a tax. the Kentucky Captive Insurance Association, the cluded from making use of any data collected Consequently, we are asking the Supreme Court Missouri Captive Insurance Association, and the as a result of the illegal notice. That would be a to affirm that federal courts may enjoin enforce- Oklahoma Captive Insurance Association. Many big victory. ment of the illegal notice without running afoul of our supporters in the captive industry also sub- of the Anti-Injunction Act. To be more specific, mitted “friend of the court” briefs as well. we contend that the information gathering and “We have been encouraged and recordkeeping requirements imposed upon We are also truly grateful for the outpouring of material advisors like CIC Services by Notice support we have received outside of the cap- humbled by the outpouring of 2016-66 are so removed from the assessment and tive industry which highlights the importance support we have received both collection phases of the federal tax enforcement of our cause well beyond the captive industry. process that enjoining those requirements does In this case, we are “standing on the shoulders inside and outside of the captive not enjoin the assessment or collection of taxes. of giants” with Amicus Briefs submitted by the insurance industry” Chamber of Commerce, the CATO Institute, Professor Kristin E. Hickman of the Are you receiving support University of Minnesota School Of Law, and the The IRS could attempt to reinstate the notice by from the captive sector as Tax Clinic at the Legal Services Center of Harvard writing a new rule with substantially similar pro- you continue to defend your Law School. visions, but that new rule would at least have to case against the IRS? be created in accordance with the process pre- scribed by the Administrative Procedures Act. We have been encouraged and humbled by the If you win, do you see a push In other words, the service would have to give outpouring of support we have received both back from the IRS on ‘micro- notice of a new proposed rule, give sufficient inside and outside of the captive insurance captives’ for the entire industry? time for the public to comment on the notice, industry. We would not be here without the sup- accept public comments, and incorporate the port of high-caliber attorneys who took up the If we win at the Supreme Court the case will public feedback into any final rule that it might mantle to advance our case, the Antonin Scalia likely be sent back to the federal district court for issue. Had this process been followed from the

28 www.captiveinsurancetimes.com CIC Services vs IRS

beginning, the IRS would have had the industry’s Do you believe this pandemic saving the bacon of small business owners, allow- support and could have collected much more tar- will highlight the importance ing them to stay open and preserve jobs despite geted and useful data more quickly. of captives, especially for lockdowns and the like. small- to medium-sized businesses in the US? In short, anyone caring about the ability of small What is your ultimate businesses and their employees to support our aim/goal, win or lose? Small businesses are critical to our country’s economy must favour expanding the appeal and economy. They employ nearly half of private accessibility of captive insurance. Our goal is to force the IRS from this point for- sector workers and account for most of the job ward to comply with the requirements of the growth over the last ten years. And yet compared The pandemic has also exposed many of the IRS’s Administrative Procedures Act when imposing to Fortune 1000 companies that have more diver- traditional criticisms of certain captive insurance substantive obligations on taxpayers (like filing sified business models and the ability to raise arrangements as unfounded. For instance, some and record keeping requirements) that are not additional cash quickly in the capital markets, risk pools that may have gone a few years with- directly related to the assessment or collection of small businesses are uniquely fragile. out claims, a source of consternation to the IRS, taxes. If we win, that will be the new law of the will now have many massive ones. Policies that land. If we lose, then we’ll have to turn to Congress Few Fortune 1000 companies will go out of once many have appeared overpriced in the for a remedy. Regardless, the IRS simply cannot be business due to this pandemic, but there’s lit- IRS’s eyes suddenly appear cheap. Businesses permitted to continue acting as a law unto itself tle doubt now that we’re going to see millions with policies protecting against COVID-19 with freedom to issue even obviously-illegal rules of small businesses do so. The impact on the job related risks like business interruption may and to enforce those illegal rules against taxpay- market is going to be dreadful. It already has have paid an arm and a leg for it at the time, but ers with impunity while evading judicial scrutiny. been. But those small businesses that had the the fact is that now such coverage generally foresight and the intestinal fortitude to insure can’t be obtained by businesses that lack it at against business interruption risks via a captive any price. Many from the industry, insurance arrangements even despite the IRS’s including yourselves have hostility are unquestionably better off today than It seems that the IRS was not smarter than the been critical of the IRS’ those who didn’t. The former are far more likely to actuaries after all and that comprehensive busi- letter sent out to businesses survive than the latter. We’ve seen several exam- ness interruption insurance has been, if anything, early into the pandemic - do ples already of captive insurance arrangements long underpriced. ■ you think the US Congress will help the industry out as requested by many via letters? “The IRS made no friends The IRS made no friends in the industry or con- gress by sending that letter when and how it did. in the industry or congress I’m confident that, despite the rhetoric, most enforcement activity against captives will ulti- by sending that letter when mately be suspended until taxpayers are able and how it did” to comply. It’s simply unreasonable to expect taxpayers to comply with IRS demands during a time when those taxpayers are forbidden by lock- down orders from legally accessing the necessary Sean King records, obtaining the required legal or tax advice General counsel or are otherwise struggling just to stay in business. CIC Services

29 www.captiveinsurancetimes.com Local Protection Global Connection

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geb.com Industry Appointments

Paul Owens is set to join Strategic Risk Lesley Thompson, who recently joined Willis Towers Watson (WTW), Solutions’ (SRS) board of directors, serving has agreed to take on the leadership of the Cayman office, subject to the as an independent director as well as a requisite regulatory approvals. strategic advisor. Thompson has over 20 years insurance man- providing regulatory guidance and managing Based in the UK, Owens will initially focus his agement experience that she brings to the key client relationships of a diverse portfolio of strategic advisory role on the expansion of SRS’s team after serving in multiple jurisdictions captive structures. operations in Europe and other new regions, both on and offshore. Her experience includes while also providing advice on governance, oper- single parent, association, group, agency, not- Van den Bergh trained and qualified as a char- ations and the overall direction of the business. for-profit, private placement life and annuity, tered accountant while working for Grant rent-a-captive, segregated portfolio compa- Thornton in South Africa. He transferred to Most recently Owens served as CEO of Willis nies, insurance-linked securities, side-cars and Grant Thornton, based in the Cayman Islands Towers Watson (WTW) global captive prac- special purpose vehicles. in 2014, where he specialised in the audit of tice and has over 30 years’ experience in the captive insurance entities. In 2016, he moved global insurance sector and recently in the Thompson joined WTW after five years with to Captiva Managers (Cayman), where he was captive industry in Europe, North America and Aon in Bermuda, she moved to the Cayman initially appointed as an account manager Asia Pacific. Islands in 2005 where she has worked with mul- responsible for a book of captives writing ti-jurisdictional independent captive managers a variety of business. He was promoted in Owens retired from his CEO role at WTW earlier and for the past four years has led the insurance 2018 to senior account manager and became this year. management services of the Maples Group. She responsible for leading the insurance manage- is also a faculty member, director and the cur- ment team in Captiva’s Cayman, British Virgin Brady Young, president and CEO of SRS, com- rent president of the International Center for Islands (BVI) and offices. He was then mented: “We have known Paul Owens for a long Captive Insurance Education (ICCIE). In the appointed to the board of directors of Captiva time and have tremendous respect for his knowl- announcement, WTW said: “We look forward to Managers (BVI) in 2019. edge of the captive market especially outside Lesley Thompson driving our continued deliv- North America which is important to us given ery of industry-leading client service.” Commenting on Van den Bergh’s appointment, our expansion plans in Europe and beyond.” Thompson said: “[Gareth] van den Bergh has a Additionally, WTW has hired Gareth van den solid foundation of technical skills and qualifi- Commenting on his new role, Owens said: “It was Bergh as a senior account manager at Willis cations which combine well with his detailed a privilege to lead the WTW global captive prac- Towers Watson (WTW), also based in the firm’s knowledge of the Cayman Islands insurance tice. Having retired and moved on from that role, Cayman office. In his new role, Van den Bergh market and regulatory regime, all of which he I am keen to put some of the experience I have will be reporting to Thompson. He will be brings to the Cayman team of WTW at a very gained to use.” ■ responsible for the day-to-day management, important time.” ■

31 www.captiveinsurancetimes.com Industry Appointments

Strategic Risk Solutions (SRS) has hired Derek Bridgeman, who joined the firm’s European operations on 18 May as managing director.

In his new role, Bridgeman will develop and lead and AstraZeneca for 12 years, subsequently join- “I look forward to working with clients and pros- the risk consulting practice in Europe. Prior to ing JLT as leader of the firm’s global life science pects to challenge the status quo and consider joining SRS, and since 2017, he has led the inter- practice before setting up his consulting firm in alternative risk transfer options,” he stated. national captive advisory practice at Marsh. In 2014. addition to his risk finance advisory experience, Brady Young president and CEO of SRS, said: he spent over 10 years in Marsh’s captive man- At SRS, Campbell will support the firm’s European “With the European operational infrastructure agement practice where he served a range of risk consulting around captive strategies and now firmly established and represented in major multinational captive owners and special pur- complex reinsurance options. European Union domiciles, the firm is gaining pose reinsurance entities. He also led Marsh’s EU traction with clients and plans to continue to Solvency II and base erosion and profit shifting Commenting on his new role, Bridgeman said: hire great talent to drive the business forward.” initiatives. “I worked with some great people and really enjoyed my time with Marsh however I am “With broker owned management firm mergers Bridgeman will join the board of SRS Europe delighted to have been presented with the continuing we are the only credible option for which includes its pan-European branch offices. opportunity to join SRS.” captive owners if they want international, inde- pendent and unbiased advice underpinned by Additionally, Neil Campbell has also joined the “The proven track record and independent nature solid management services,” he added. European consulting team as part of the expan- of SRS were highly appealing to me and I look sion of SRS Europe’s consulting operations and forward to building on the solid foundation Last month, SRS announced the appointment of will focus primarily on the firm’s structured rein- developed in Europe to date. Recent industry Andy Hulme as part of an expansion in underwrit- surance consulting capabilities. changes and economic pressures arising from ing capabilities and services. COVID-19 mean that now, more than ever, cli- Campbell began his career with ICI’s insurance ents will be challenged to seek opportunities to Based in the UK, Hulme provides underwriting team in London. He was risk manager for Zeneca optimise their overall insurance spend.” support to SRS clients globally.

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