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TMCNet:  A.M. BestTV: Vermont and Washington D.C. Regulators Describe Handling Risk Retention Group Failures

[August 09, 2017]

A.M. BestTV: Vermont and Washington D.C. Regulators Describe Handling Risk Retention Group Failures

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. Click on http://www.ambest.com/v.asp?v=vcia1817 to view the entire program.

"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.

Recent episodes of A.M.BestTV include:

  • Rated U.S. Captives Stand Above Commercial Peers: Fred Eslami, senior financial analyst, A.M. Best, reiews a recent Best's Special Report that details U.S. captive insurers and how they continue to perform when compared with their commercial lines counterparts, mainly due to their loss-control activities and expertise in the coverages that they write: http://www.ambest.com/v.asp?v=captivereport817.
  • New Tools Help Fight Distracted Driving, Says Brownyard Chairman: Bryan Brownyard, chairman, Brownyard Group, said insurers are using a growing range of electronic and physical solutions to prevent distracted driving, but it remains a huge problem for insurers of commercial vehicles: http://www.ambest.com/v.asp?v=brownyard517.
  • Emplay's Sur: Insurers Should Apply AI More Broadly: Sanchita Sur, founder and chief executive officer, Emplay, said insurers utilizing artificial intelligence must expand their primary focus to sales, distribution, claims, fraud and other areas beyond actuarial science: http://www.ambest.com/v.asp?v=sur617.
  • Expenses Hurt Non-Standard Automobile Writers' Underwriting Performance, Says A.M. Best Analyst: David Blades, senior research analyst, A.M. Best, reviews a recent Best's Special Report that details the deteriorating performance of the U.S. non-standard automobile insurance sector: http://www.ambest.com/v.asp?v=nonstandardauto717.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Company, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.


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