North Carolina Captive Insurance Association


151 Crest Road
Southern Pines, NC 28387

North Carolina Captive Conference Targets All Experience Levels

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This article was Originally published by July 10, 2019 recently spoke with Scott Bailey, communications chair with the North Carolina Captive Insurance Association (NCCIA) to discuss the annual conference, scheduled for August 21–23 at the Ballantyne Hotel in Charlotte, North Carolina. readers can register online for this fast-approaching event.

North Carolina is one of the youngest US captive domiciles, enacting its captive insurance law in October 2013. The first North Carolina captive conference took place in August 2014. Tell readers how the conference has evolved over the last 5 years.

As North Carolina has grown as a domicile, so, too, has the North Carolina Captive Insurance Association Annual Conference. The growth has been quite exciting, and as the number and size of the captives in North Carolina have grown, we have seen an evolution in the content and types of attendees. The conference content is a reflection of the captive insurance constituency in the North Carolina domicile—professionals with many years of experience along with those who are new to captive insurance. The Conference Committee has designed a schedule enabling captive veterans to dive into the hottest issues affecting the captive landscape while also maintaining introductory content for attendees who are new to these solutions.

North Carolina has been one of the fastest-growing captive domiciles. At the end of 2018, 244 captives were domiciled in North Carolina, up from just 52 captives 5 years earlier. A record 85 captives were licensed in 2016, followed by 66 new captives in 2017. Tell us more about North Carolina’s rapid ascent as a captive domicile of significance.

North Carolina is buoyed by several factors that give the state an edge as a domicile. Predominant among these is the support for the industry by the North Carolina Department of Insurance (NCDOI) under Commissioner Mike Causey and Senior Deputy Commissioner Debbie Walker, CPA. The NCDOI has provided fair and balanced regulation while also supporting the growth of the industry. We also note the commissioner and Debbie and many of her colleagues will be in attendance at this year’s conference. In addition, North Carolina combines a business-friendly economic climate and captive legislation that provides several unique benefits to captive owners and managers.

Describe what makes the captive regulatory environment in North Carolina unique.

North Carolina’s captive insurance market has been supported by many unique factors. As noted previously, North Carolina benefits from having a strong and supportive regulator. The North Carolina DOI has a dedicated captive insurance team, providing the state with a regulatory function that is educated on captive insurance and understanding of the unique risks and opportunities they provide within the risk management industry. Additionally, the North Carolina legislation is structured to incentivize captive managers and owners to support North Carolina service providers by providing flexibility for directors. The legislative leadership has been and remains highly supportive of the captive insurance industry as an economic development tool and keeping North Carolina’s captive statute on the cutting edge of the evolving industry.

We understand that Ryan Work, vice president of government relations at the Self-Insurance Institute of America (SIIA), will be speaking at the conference on current Internal Revenue Service (IRS) and US governmental thinking about captive industry regulation and standards. How does the NCCIA view Washington’s continued captivation with the captive insurance industry and how it is taxed?

Certainly, the IRS has taken an interest in captives and has secured some major decisions through the Tax Court, beginning with the Avrahami case, continuing with the Reserve Mechanical case, and the most recent Syzygy decision. The NCCIA has carefully considered the fact patterns involved in each of these cases, and we are continuing to advocate for our industry participants. If a rehearing is granted in the CIC Services case regarding the filing of IRS Form 8886, the NCCIA is prepared to file an amicus brief. Additionally, the NCCIA is collaborating with 10 additional parties on an amicus brief in the Reserve Mechanical case pending the result of ongoing mediation.

The NCCIA has noted, however, there are several lessons to be learned from each of these cases. With each decision, the IRS has shown us a clearer path for what it determines to be acceptable. These short-term challenges will ultimately strengthen the industry by providing us with insight on what sinks or floats in the eyes of our regulators.

We note that there will be a session on best practices for forming and operating a captive as well as a session on captive compliance. Tell us more about the NCCIA’s approach and view on captive best practices and captive compliance and how it works to support captive best practices and compliance.

The strength of the NCCIA flows from our membership, and we are fortunate to work with some of the best in the captive business. The NCCIA takes a three-pronged approach to supporting our members: connecting our membership networks, advocating for our membership, and educating our members through the conference and other outlets. We support the North Carolina captive industry by ensuring our membership has adequate resources and access to whoever can assist with any issues that may arise. We strive to ensure we maintain a market of friendly competition to the benefit of our captive owners, managers, and service providers. Additionally, we strive to ensure our advocacy efforts are an accurate representation of the needs of our membership and market participants. The NCCIA’s aim is to have the highest- and best-functioning captive legislation possible. Finally, our goal is to ensure we are able to provide our membership with the resources they need to operate at an optimum level. This includes hosting our annual conference, and we are exploring additional learning opportunities for our membership.

The captive domicile landscape has recently become more and more competitive with North Carolina contributing to this trend. We note that no new captive measures were approved in North Carolina in 2019; however, we understand legislation that would temporarily exempt captive insurance companies that redomesticate to North Carolina from state premium taxes will likely be considered in the next legislative session. What other actions is the NCCIA taking to help the state remain a competitive captive domicile?

The NCCIA remains in constant contact with our representatives in the state legislature and with our industry stakeholders. Our goal of obtaining a tax holiday on captive insurance companies wishing to redomicile to North Carolina remains an important goal for us and our stakeholders, and we are committed to maintaining North Carolina as one of the most captive-friendly states in the country. The NCCIA is planning to continue pursuing this matter as the legislative landscape will allow.

How did the NCCIA approach putting together its 2019 conference schedule? Give us some of the highlights that make it stand out from other captive events.

Content for the NCCIA conference is driven by the amazing intellect and experiences of our members, exhibitors, and sponsors. Our presenters are bringing some great topics to our attendees this year, including sessions focusing on healthcare captives, diversity and inclusion in the captive industry, and captive boards and governance functions, among others. These courses, in addition to our core material, provide our attendees of all experience levels with the skills needed to continue the progress of the North Carolina domicile.

To get the most out of the conference, what suggestions do you have for new captive owner, risk manager, and insurance professional attendees?

As previously stated, the conference provides several opportunities for all experience levels to learn and network with industry peers. The content spectrum ranges from course material for new captive owners to advanced topics for insurance professionals who have spent careers in risk management. The conference committee has put a tremendous effort into ensuring the material is user friendly so our attendees can tailor their development experience. Given industry trends, I’d recommend checking out the healthcare-related course material along with those addressing diversity in the industry. Additionally, the conference provides several opportunities to network, including an ’80s themed party. The group learning and networking opportunities provide tremendous value for all attendees.

What major outcomes does the NCCIA want to see come from this year’s conference?

The conference provides the most direct method for the NCCIA to interact with the membership. It provides a bit of a temperature reading for the industry, and it allows us to view what practitioners are seeing on the horizon. In turn, this allows us to better serve our members in the coming year. We’re looking forward to that direct interaction, and we’re hoping our attendees can enjoy themselves while they are at it!

Any closing comments?

This year’s conference is set to be our best yet. We’ve got top-notch sponsors and exhibitors, the learning material appears top-notch, and the venue couldn’t be better. I’m looking forward to seeing everyone in Charlotte, and I look forward to seeing the 2019 NCCIA conference exceed all of our expectations. Thank you, also, to for the opportunity to chat about our conference!

You are welcome, Scott; nice speaking with you.

The current communications chair with the North Carolina Captive Insurance Association (NCCIA), Scott Bailey, is an audit partner at Carr, Riggs & Ingram, LLC, in Raleigh, North Carolina. Mr. Bailey provides clients with a broad range of services, including accounting, auditing, and risk advisory. He focuses his practice on the insurance services and construction industries. In addition to the NCCIA, he is a member of the American Institute of Certified Public Accountants, the North Carolina Association of Certified Public Accountants, and the Association of International Certified Professional Accountants. Mr. Bailey can be reached by email.

(Photo of Mr. Bailey above is courtesy of Carr, Riggs & Ingram, LLC.)