1. Redefining Workers’ Compensation in Captives:
Can It Be Done?

2. Redefining Workers’ Compensation in Captives
Janet Grace, Program Manager, Captive Division, CT Insurance Department
Stephen DiCenso, FCAS, MAAA, Principal and Consulting Actuary, Milliman
Brian First, EVP, Arch Insurance Group
Michael Maglaras, Principal, Michael Maglaras & Company

3. Redefining Workers’ Compensation in Captives:
Setting the Stage...

4. Redefining Workers’ Compensation in Captives:
Setting the Stage...
The traditional view is that an admitted carrier is needed to write workers’ compensation and employer’s liability coverage on a first dollar basis or in excess of a deductible.
49 states permit state-regulated qualified self-insurance...of those states, 36 permit groups of employers to self-insure.
Self-insurance for workers’ compensation has a long history in the United States...SIIA estimates 6,000 businesses nationwide self- insure workers’ comp.
The regulation of individual and group self-insurers varies by state...it can be either the Bureau of Workers’ Compensation or the Insurance Commission.

5. Redefining Workers’ Compensation in Captives:
So, What’s Standing In the Way?
Regulation?
“Custom and Practice”?
Lack of coordination between departments in state government?
Sufficient lobbying by insurers?
Insufficient lobbying by the captive industry?
“It just can’t be done...”

6. Redefining Workers’ Compensation in Captives:
Setting the Stage...
What’s Connecticut’s Position?

7. Redefining Workers’ Compensation in Captives:
Setting the Stage...Qualified Self-Insurance
Support for Ultimate Losses
Loss Control
& Data Analytics
Unbundled/ Bundled Claims Services
Excess Limits/ Statutory Limits
2nd Injury Fund Assessments

8. Redefining Workers’ Compensation in Captives:
Setting the Stage...Qualified Self-Insurance
Annual
Re-filing Requirements
Adherence to NCCI Rating
Adherence to State W/C Law
Any State Managed Care Payment Requirements
Collateral

9. Redefining Workers’ Compensation in Captives:
So, What’s the Decision?

10. Redefining Workers’ Compensation in Captives:
So, What’s the Decision?
Accrual/ Funding
Securitization of Retention
Qualified Self-Insurance
Statutory Limits Protection
Claimant Protection

11. Securitization of Retention Statutory Limits Protection
Redefining Workers’ Compensation in Captives:
So, What’s the Decision?
Accrual/ Funding
Securitization of Retention
Captive
Statutory Limits Protection
Claimant Protection

12. Redefining Workers’ Compensation in Captives:
So, What Are the Differences?
Self-Insurance
Captive
Excess Insurance
Excess or Reinsurance
Retention
Collateral
Qualified Claim Mgmt
Loss Control
Adherence to Regs
Capital and Surplus
Multi-line Solutions

13. Redefining Workers’ Compensation in Captives:
So, What’s the Decision?