SCCIA Palmetto Captive Journal - Issue 1 - 2014

The

Captive Insurance J O U R N A L

1st Quarter 2014

I N

T H I S

I S S U E

Page 2 President’s Message

Page 3 News from the DOI

Page 4 SCCIA’s Gone Social

Page 5 SCCIA 15th Annual Executive Educational Conference Preview

Page 6-7 SCCIA 15th Annual Executive Educational Conference Registration Forms

About SCCIA The South Carolina Captive Insurance Association exists to enhance the captive industry within South Carolina and promote South Carolina as the leading domicile within the United States.

SCCIA Member Spotlight Keith Giddens is one of the South Carolina Captive Insurance Association’s newest Board Members. He began his role as a Director in January and has been a wonderful addition to the Association. Keith currently serves as the President of Liquid Combustion Technology headquartered in Travelers Rest, South Carolina. Liquid Combustion Technology (LCT) is a U.S. managed and operated company that manufactures air-cooled four cycle gasoline engines for related outdoor power equipment markets. It was at LCT that Keith became interested and involved in the Captive Insurance Industry.

Keith graduated from Macon College and later earned the following graduate degrees: BBA- Accounting from The University of Georgia, Masters of Accountancy (Taxation) from The University of Georgia and most recently a Ph. D. in Business from Northwestern University.

Prior to going into business for himself, Keith served as a Partner at Ernst & Young in Greenville, SC.

His other professional positions included the following: • Director of the Small Business Develop Center • President and COO of Homegold Financial, Inc. • President of The Money Store, Inc. In addition to his active role in the SCCIA, Keith is also a member of the American Institute of CPA’s and the South Carolina Association of CPA’s. In his spare time, Keith serves as a Deacon at Rocky Creek Baptist Church and enjoys hunting, fishing, working on older Chevrolet Cars and of course cheering on the Georgia Bulldogs. He and his wife, Kristi have three sons, one daughter by marriage and one grandson.

Interesting fact about Keith – He is a 5th Degree Black Belt in Tae Kwon Do!

DONATE NOW

As part of the SCCIA’s legislative efforts moving forward, CIPAC (Captive Insurance Political Action Committee) was formed in order to be collectively represented as an industry as it relates to legislative matters.

For more information and Pledge Form go to our website www.sccia.org or contact the Association Office at 1-855-CAPTIVE.

Donate online at www.sccia.org.

The Captive Insurance Journal First Quarter, 2014

President’s

Message Managing Editor Cameron Yost Design/Graphics Florence Design, Inc. Editorial and Advertising Office PO Box 1763 Columbia, SC 29202 855-CAPTIVE

SOUTH CAROLINA CAPTIVE INSURANCE ASSOCIATION 2014 DIRECTORS & OFFICERS Chairman of the Board Andrea Bartlett Bartlett Actuarial Group, Ltd. President Chris Stormer Bauknight, Pietras & Stormer, PA Treasurer/Corporate Secretary Michael Coulter Aon Insurance Managers (USA) Directors Gavin Foggon Marsh Management Services Inc. Robert Schmid Energy Insurance Services David Smith Risk Management Family Dollar Stores, Inc. Keith Giddens Liquid Combustion Technology Executive Director Cameron Yost

© Copyright 2013 SC Captive Insurance Association

POSITIONING FOR CONTINUED SUCCESS These are exciting times for the South Carolina Captive Insurance Association as we begin 2014. While the U.S. market has exploded with new domiciles looking to get into the captive insurance arena, South Carolina has quietly gone about strengthening its position as one of the top “go to” domiciles in the United States.

On the captive management side, South Carolina now boasts more than ten of the world’s foremost captive managers with “boots on the ground” as our friend Ron Krebs likes to say. The decision makers at each of these captive managers have clearly determined that South Carolina is the place to be by investing their resources and growing their captive operations. In some instances, captive managers are even managing captives domiciled in other states with their resources here in South Carolina. Clearly, South Carolina has assembled a critical mass of very talented captive insurance professionals with the skills to serve anything from the most complex risk retention group to a Fortune 500 captive to the simplest of 831(b) micro captives. South Carolina is well positioned to serve not only the needs of captives electing to domicile in South Carolina, but also the back office needs of captives domiciled anywhere in the U.S. On the regulatory front, the South Carolina Department of Insurance has taken many positive steps to further position South Carolina as one of the “go to” domiciles for the formation of a captive insurance company. Director Ray Farmer has now been on the job 15 months, during which time he has reorganized the Department and streamlined operations in such a way that captive managers throughout the 2

Chris Stormer

state are seeing record times for turnaround of business plan changes and other regulatory interactions – all of which further help to position South Carolina as the “go to” domicile. In the past 12 months, we have also welcomed Jay Branum to the newly created position of Director of Captives to help lead the State’s captive insurance business.

Also, over at the State House, House Bill 3797 (which would permit the creation of separately incorporated cells, permit captives to go dormant, eliminate the Certificate of General Good process and make more flexible certain other provisions of the captive law) continues through the legislative process, with the House having passed the bill in the last session and the Senate having passed it in its first two of three readings. Recently, the Board hosted a dinner reception for the members of the Senate Banking and Insurance Committee to thank them for their support of the industry and identify any steps that might be necessary to ensure the third reading of the bill is successful. We hope to have positive news to report on that front in our next newsletter. Passage of the bill will provide Jay Branum and his team with additional solutions for potential captive owners to consider as they explore South Carolina as a domicile.

Taken together, the above is clear evidence that South Carolina is well positioned for long-term sustainable success in the captive insurance market. Now it is time to get to work on spreading the news beyond our borders. 2014 will indeed be a very exciting year!

The Captive Insurance Journal Third Quarter, 2013

NEWS

From The SC Department of Insurance

Michael Shull appointed to Supervising Financial Analyst of Captives Division The South Carolina Department of Insurance announced recently that Michael Shull had been appointed to the position of Supervising Financial Analyst of the SC DOI’s Captives Division. This new role will report directly to the Director of Captives, Jay Branum and will have supervisory responsibility over the work of four Financial Analysts.

In his former role, Michael served as a Financial Analyst for the department with his primary responsibility of managing business plan changes. During his tenure, Michael handled over 350 business plan changes per year and succeeded in reducing average process time from over ten days to less than two days. In so doing, he demonstrated a facility for very focused, incisive, and quick analysis, coupled with the ability to make independent decisions and exercise sound business judgment. These qualities equip him well to assume the responsibilities of his new position.

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The Captive Insurance Journal First Quarter, 2014

The SCCIA’s Gone

Social!

Beginning last December, the South Carolina Captive Insurance Association has expanded their educational and marketing efforts to add webinars and new social media accounts to the mix!

The Education Committee has held two successful webinars so far on the following topics:

Business Risk v. Insurance Risk – In this webinar, Ben Glenn and Gary Osborne hosted a discussion of two case studies of recently decided court cases involving varying types of risk. The first case study involves Wendy’s International’s captive Scioto and the other study focuses on the recently decided Salty Brine case.

Wendy’s deduction for premiums paid to their captive insurance company were ultimately allowed over the course of two

separate IRS audits and ultimately by the Illinois Department of Revenue. Whereas, in the Salty Brine decision deductions for premiums paid to two offshore insurance companies were disallowed by a U.S. District court decision.

A key issue in both decisions was the types of risk and whether it was insurance in the commonly accepted sense or a business risk that was not true insurance.

The issue of business risk vs. insurance risk will follow the case study discussion, in addition to a question and answer session.

The Role of a Third Party Administrator – In this webinar, we explored the role of a Third Party Administrator (TPA) and the important role they play in the Captive Insurance Industry from a Captive

Manager’s prospective as well as the point of view of a TPA. The presentation covered the following: • Provided insight into the roles of a Third Party Administrator (“TPA”) and industry best practices • Answered why an effective captive management relationship with one’s TPA is vital to the success of the overall program • Presented the potential risks to the captive and its service providers when a “team approach” is not implemented • Conveyed why expertise and communication are the keys to ensuring success for all involved parties

To stay informed on when the next webinar will be held, be sure to subscribe to our email updates and follow SCCIA on our social media accounts below:

Like, Follow and Friend us to stay informed on the latest SCCIA news!

Like Us Here! @South Carolina Captive Insurance Association

Follow Us Here! @SCCaptives

Add Us To Your Circle Here! @South Carolina Captive Insurance Association

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Join the Conversation Here! @South Carolina Captive Insurance Association

The Captive Insurance Journal First Quarter, 2014

We are excited to return to Wild Dunes Resort, for the SCCIA 15th Annual Executive Educational Conference, September 22-24, 2014. Wild Dunes Resort is located on the beautiful Isle of Palms, SC, just outside of Charleston, SC. This year’s conference continues the long tradition of enriching the knowledge of captive and alternative risk transfer professionals by presenting a cutting edge educational program.

The Conference also offers the opportunity to network with like-minded industry professionals.

Networking breaks, a hosted lunch, the golf tournament and other social events during the conference give you ample time to interact with your fellow professionals.

Whether you are a seasoned veteran, new to the industry, a captive owner, a Risk Retention Group member, a captive Director, a service provider, or a risk management professional you will gain from attending the conference.

Take advantage of our Early Bird Registration Rates by registering before June 1st!

Visit our website: http://www.sccia.org/?page=Conference Or register using the form on the next page.

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