Expertise as to Captive Insurers. I set out here, my background as to captive insurers. In fundamental terms, a captive insurer is simply an insurance company closely held or wholly owned by the insured or insured’s parent with the objective of using the captive as a risk management tool while concurrently optimizing cash flow and tax status.
Captives have been long used in commerce in the U.S. with any number of states actively soliciting corporations to form captives domiciled and regulated in the state. By way of example, Vermont among others has long encouraged captive formation using its state captive law (and of course Vermont vendors) as the vehicle to formulate such insurers.
In all of this, captives are frequently used vehicles for many organizations. Captives permit the parent/owner to (i) show evidence of insurance as may be required by any number of state and federal regulatory bodies, (ii) to show evidence of insurance to private sector entities demanding the same (perhaps with the captive issuing a certificate of insurance as evidence of an underlying policy) and (iii) as an internal vehicle for the parent/owner to manage the related insured risks.
Throughout my career, I have dealt with captive insurers in most every position I have held including among others the following:
- As Commissioner of Insurance and as First Deputy Insurance Commissioner, I administered the State of Iowa’s self-insurance program for employer’s proof of coverage for workers compensation with any number of employers submitting policies issued by their captive. In those instances my responsibility was to go behind the captive and provide assurance to the state that the captive could pay in the event of workers compensation claims;
- As general counsel to the American Academy of Actuaries, I dealt regularly with captives in that the member of the Academy, who are qualified actuaries, provided consulting services to captives;
- As Chief Executive Officer of the National Council on Compensation Insurance (“NCCI”) I dealt regularly as well with captives again in their role in connection with workers compensation;
- In addition, I have dealt with captives in most every position I have held. They are a vehicle that has been in use for a long time and their status and characteristics are well understood by those like myself who have been involved extensively in the U.S. insurance industry.
In addition to this general summary, the material that follows is further evidence of my captive insurance expertise.
Applicable Captive Expertise: Regulatory. My expertise as to these matters can be found as follows: I am a former:
- Commissioner of Insurance (Iowa);
- First Deputy Commissioner of Insurance; and
- Assistant Attorney General assigned on a full time basis to the Department of Insurance (Iowa). ( Functioning as the Department’s general counsel.)
- Administrative Law Judge, f/k/a Hearing Officer;
- Member of the National Association of Insurance Commissioners (NAIC) and Member of its Executive Committee;
In those capacities, on a daily basis, I had full regulatory oversight and responsibility for and the application of (i) the regulation of insurance, (ii) captive insurers, and (iii) captive insurance companies and their duties and obligations.
Applicable Captive Expertise: Legislative. In addition to my regulatory background, I have served or am serving in the following legislative capacities, each of which included daily knowledge of and interaction with captives as it related to (i) the regulation of insurance, (ii) captive insurers, and (iii) captive insurance companies and their duties and obligations.
- Legal Counsel to the Iowa House of Representatives;
- Chief of Staff at the U.S. House of Representatives,
- Elected Member of the Florida House of Representatives (currently currently serving my 5th year) where I serve as a Member and Vice Chairman of the Insurance Committee (among other committees), which has legislative oversight over all insurance operations in the state (as administered by the Florida Office of Insurance Regulation) including those relating to captive insurance;
- In addition, I have sat on and served as Vice Chairman of the Civil Justice Subcommittee of the Florida House, which has responsibilities as to Florida laws that establish (among other things) captive insurers at the state law level;
- Elected Member of the Boca Raton City Council; Deputy Mayor of the City of Boca Raton, where I served as the Council’s lead on insurance issues;
Applicable Captive Expertise: Industry. In addition to my regulatory background and my legislative background as to captives, I have served or am serving in the following capacities, each of which included daily knowledge of and interaction with captive insurers in the following ways: (i) the regulation of insurance, (ii) captive insurers, and (iii) captive insurance companies and their duties and obligations.
- American Academy of Actuaries, Washington, D.C., (whose members are often intimately involved captive insurance) where I served as General Counsel and Chief Lobbyist;
- President and Chief Executive Officer of the National Council on Compensation Insurance (NCCI), a major U.S. property casualty insurance company doing business throughout the United States. NCCI employs about 1,000 personnel. While CEO, this position entailed responsibility for pricing some $100 billion of property casualty insurance premium;
- Nationally certified Reinsurance Arbitrator (ARIAS-US), where I sit as an arbitrator on disputes between (among others) insurers and their reinsurers and enter decisions as to captive insurance,
- Attorney practicing primarily in the area of insurance and reinsurance and admitted to practice in Florida, Illinois (This Illinois license is in inactive status, placed there by me at my volition and eligible for reactivation at any point in time upon my request.) and Iowa (all upon examination) with an insurance practice;
Applicable Captive Expertise: Legal. In addition to my regulatory, industry and legislative background, I have served or am serving in the following legal capacities, each of which included daily knowledge of captive insurance in the following ways: (i) the regulation of insurance, (ii) captive insurers, and (iii) captive insurance companies and their duties and obligations.
- As stated above, I am an attorney admitted to practice in Florida, Illinois and Iowa (all upon examination) with an insurance practice;
- Legal Counsel to the Iowa House of Representatives;
- Practicing attorney at Hager & Schachterle;
- Iowa Counsel to the Property Casualty Insurance Association of America (PCI).
- Legal Counsel to the Professional Insurance Agents of Iowa (property casualty agents, who sell among other products, captive insurance);
- Legal Counsel to the Iowa Association of Life Underwriters (life, health and annuity insurance agents).
- Practicing attorney (currently) in Florida at the Hager Law Firm;
- General Counsel and Chief Lobbyist to the American Academy of Actuaries, whose members are often involved in captive insurance matters;
Applicable Captive Expertise: Formal Education. In addition to my regulatory, legislative, industry and legal background, my educational background has also well-equipped me to provide captive insurance expertise as follows:
- Bachelors degree: Mathematics (specifically a B.A. in secondary mathematics education) - University of Northern Iowa;
- Masters degree: Educational Psychology, University of Hawaii; and
- Juris Doctorate degree (law degree) from the University of Illinois;
- Bar Admission: U.S. Supreme Court;
- Bar Admissions, the states of Iowa, Illinois (Inactive) and Florida, all by examination;
- Certified U.S. Reinsurance and Insurance Arbitrator;
In the aggregate, these experiences have given me a significant grounding to provide expert captive insurance testimony.
Contact captive insurance expert Bill Hager at 561-306-5072 or via email to discuss your case.