Connecticut to partner with local firms to expand captive insurance program
The State of Connecticut Insurance Department has launched an initiative to work with local accounting firms to expand their presence in the captive insurance company market.
As firms and professionals hold the role of a trusted advisor to mid-sized businesses, the SCID feels that they are best positioned to assist in the education and communication of the benefits of captive insurance companies to local businesses. The state has tapped the National Network of Accountants and Private Insurance Management Inc. to assist in the design and launch of the education program.
The program comes on the heels of the coronavirus pandemic, in which commercial insurance coverage has offered little reimbursement to most businesses negatively affected by the outbreak.
“With the serious problems our state and our country are facing right now, we couldn’t think of a better time to educate our business community about risk management tools that are available to them, with which they might not be familiar, such as captives,” said Janet Grace, program director of the State of Connecticut Insurance Department’s Captive Insurance Division, in a statement. “Businesses in our state that currently have captive insurance companies will have a layer of relief during this crisis that others will not. We want to make certain that all businesses in the state are better educated to all the options available to them to protect against future situations that could create catastrophic losses. We believe that working with our state’s great accounting firms is the best approach to provide this type of outreach and education for Connecticut based businesses.”
The outreach and educational program will aim to teach accounting firms the benefits of captives — also known as private insurance companies — and how to identify clients within their firm’s existing practice areas who stand to benefit the most. As part of the program, the National Network of Accountants will work with the state to ensure that local accounting firms can supply benefits of captive insurance companies to their clients.
“Most commercial business interruption insurance policies contain an exclusion for losses sustained as a result of a pandemic,” said Paul Hyl, principal of Private Insurance Management, in a statement. “The same goes for loss of key customer or supply chain interruption insurance, which most businesses don’t even maintain because such policies are too expensive in the commercial market. The pandemic exception, or other exceptions, such as the requirement of a physical loss, does not exist in most captive insurance company lines of coverage.”
“It’s all about education and communication” said Joseph Tucciarone, founder and chairman of NNA, in a statement. “If we can get the accounting firms comfortable with the concept, I believe we can have a positive impact on businesses across the state of Connecticut and help them solidify their insurance and risk management planning.”
For more on the State of Connecticut Insurance Department, head to its site here.