What Your Captive Manager What Your Captive Manager D D Doesnt Know - - PowerPoint PPT Presentation

What Your Captive Manager What Your Captive Manager D ’t K D ’t K Doesn’t Know Doesn’t Know (but you were afraid to tell them … a

but you were afraid to tell them … a severely fractured presentation severely fractured presentation)

HCIC HCICup

up Forum 2013

Forum 2013

Note from the David and Ward. We really tried hard to make this a serious presentation full of facts, figures and stuff you all could really use. What yo u see here is our attempt to reign in Jason’s wild

• imagination. Bear with us please.

David J. Kahaulelio David J. Kahaulelio – President | Queen’s President | Queen’s Insurance Insurance Exchange, Inc. Exchange, Inc.

• Mr. Kahaulelio has served as President of Queen’s captive insurance company since August 2000 and as Vice President Risk

Management of The Queen’s Health Systems since November 2000. Prior to 2000 David was a professional body builder specializing in Olympic Dead Lift competitions. That is why his left arm is slightly longer than his right.

• He directs Queen’s Health Systems activities which affect risks of loss, manages insurance and reinsurance acquisition and

pricing administers risk finance and transfer programs including workers compensation and captive insurance programs pricing, administers risk finance and transfer programs including workers compensation and captive insurance programs including all claims management activities. He also surfs, plays the ukulele and has been nominated for an Emmy for his portrayal of Ralph Cramden in the Hapa Haole version of “The Honeymooners go native…”

• Mr. Kahaulelio joined Queen’s in November 1997 as Manager of Employee Safety and Workers Compensation.
• He has over 35 years experience in insurance claims and sales, having held management positions at regional and national

insurance companies, mostly by the hand.

• He attended the University of Hawaii. He is President and Director of the Hawaii Chapter of Risk and Insurance Management

Society, Inc. (RIMS) and is a member of the American Society of Healthcare Risk Management (ASHRM). He wants to be Governor of the great State of Hawai’i but has been told to wait his turn Governor of the great State of Hawai i, but has been told to wait his turn.

• Mr. Kahaulelio has been active with Hawaii Captive Insurance Council (HCIC) and served previously as its past Chairman of

the Board. He has made his mother proud

Ward Ward Ching Ching ‐ Vice Vice President, President, Risk Risk Management Management Operations | Safeway Operations | Safeway Inc. Inc.

• Ward Ching is Vice President, Risk Management Operations at Safeway Inc. located in

Pleasanton, California. His responsibilities include Enterprise Risk Management, Integrated Risk Finance, Hazard Loss Control, Environmental Compliance, Property Risk Control/Engineering and a variety of retail, distribution, and manufacturing risk management initiatives including Safeway’s Culture of Safety initiatives, including Safeway’s Culture of Safety.

• Prior to joining Safeway, Mr. Ching was a Principal at Towers Perrin and a Managing Director at

Marsh.

• Mr. Ching completed his undergraduate and graduate degrees in International Relations and

Economics at the University of Southern California and has taught and written extensively on the subjects of International Relations, Game Theoretic Applications in Foreign Policy and Enterprise Risk Management. This guy is really boring.

• Mr. Ching has been a member of the Hawaii Captive Insurance Council since its inception and

was also involved in the formation of Hawaii as an on‐shore captive domicile. Mr. Ching has been an organizer or consultant to a large number of captives now domiciled on‐shore, redomesticated as admitted carriers, or continue off‐shore in Bermuda and Cayman. So, if , y , anything goes wrong with your captive, it’s his fault.

Michael S. Michael S. Owens Owens – Senior Senior Director, Director, Insurance Insurance Finance Finance / / Risk Management Risk Management | Marriott | Marriott International International

• Mr. Owens is the Senior Director, Insurance Finance in the Risk Management Department at Marriott

International in Washington, DC. Marriott is a worldwide hospitality company with $13 billion dollars in sales across 3,800 operating units in the United States and 75 other countries and territories. Marriott’s Risk Management Department is responsible for coordinating insurance coverage for Marriott operations, g p p g g p providing claims administration services, overseeing Loss Prevention and Fire Protection activities and coordinating contingency planning activities. Michael was personally responsible for the two week Federal Government shut down. He says it was good for business.

• Mike Owens is responsible for overseeing all Risk Management finance and systems activity including
• Mike Owens is responsible for overseeing all Risk Management finance and systems activity, including
• versight of two captive insurance companies in Hawaii.
• He has worked at Marriott since 1984, when it was two rooms and a gas station run by three people.
• Mike is a Graduate of Loyola College in Baltimore, MD, with a Master’s degree in Finance and a bachelor’s

degree in Business Administration.

• He holds certifications as a CPA, CIA, and CISA. EIEIO!
• He lives in Columbia, MD with his wife and four children, all of which look like him.

Jason Flaxbeard, CPCU, ACA Jason Flaxbeard, CPCU, ACA ‐ ‐Senior Senior Managing Managing Director | Beecher Carlson Director | Beecher Carlson

• Jason leads the Beecher Carlson captive/alternative risk transfer operations throughout the US, Bermuda and

Cayman Islands. Beecher Carlson is one of the world’s largest captive managers, known for its innovative approach in today’s industry. Unlike former VP Gore, he did invent the internet. J h 15 f i i th ti i i d t d 20 i th ti

• Jason has over 15 years of experience in the captive insurance industry and over 20 years in the accounting
• industry. Jason also managed Beecher Carlson’s Hawaii office. He is on heavy medication for the Accounting

side of things, so no sudden movement in the audience is suggested.

• In 2006, Jason was moved to Denver to run all of Beecher Carlson’s captive operations, consisting of over 100

p p g captives, including many Fortune 100 companies. He has extensive experience with all lines of business. Actually is likes lines and stays within them as much as possible. He is on medication for this as well.

• Jason is a graduate of Bath University, England, where he earned a Bachelor of Science degree in Economics,

and public bathing and public bathing.

• He is also an English Chartered Accountant and a Chartered Property and Casualty Underwriter. On meds for

this too.

• Jason is a board member and frequent speaker at CICA and has spoken at VCIA, HCIC, RIMS and other trade

conferences. From what we can tell, Jason’s multilingual in both human and geek languages. Ask him to translate into Klingon for a good laugh.

Overall objectives of the session: Overall objectives of the session:

What should a captive manager do for a program to be successful? What should a captive manager do for a program to be successful?



What do clients expect from captive managers? What do clients expect from captive managers?

 

What do managers expect from clients? What do managers expect from clients?



How do captive managers add value? How do captive managers add value?



All captive presentations should be All captive presentations should be moderated by someone with a British ? accent?

A T

• A. True
• B. False

0% 0%

A. B.

0% 0%

Can you pronounce aloud the last name Can you pronounce aloud the last name

• f our esteemed panelist

Dave Kahaulelio?

• A. True
• B. False

0% 0%

A. B.

0% 0%

Questions for the panel: Questions for the panel:

What is the most important What is the most important thing your captive manager does thing your captive manager does for you for you or your program

• r your program?

for you for you or your program

• r your program?

Wh t th t i t t thi What are the most important things you look for when selecting a captive manager. Are they simply commodities, so the best price wins?

• A. True ‐ but it

d d h depends on the exchange rate

• B. False ‐ but may

include lunch

A. B.

0% 0%

C ti d 100% f th i ti Captive managers spend 100% of their time

• n captive management (risk, operational,

insurance). Clients do the same ‐ correct?

• A. True – don’t we all?
• B. False – who wants

to know?

0% 0%

A. B.

0% 0%

When FASB issues accounting guidance this When FASB issues accounting guidance, this is of intense interest to the panel (managers h ld b th f t d f h i should be on the front end of changes in accounting principles and the impact on clients).

• A. It depends on what

p “intense” means

• B. Clients prefer to be
• B. Clients prefer to be
• n the backend of

anything technical anything technical

A. B.

0% 0%

When investment managers call a captive When investment managers call a captive manager with products designed to improve ti t thi i th t i t t captive returns, this is the most important item on a risk manager's desk.

A True

• A. True
• B. False

0% 0%

A. B.

0% 0%

Captive owners always want to hear about Captive owners always want to hear about Solvency II and the NAIC and how these l t b di ff t th i ti regulatory bodies affect their captive, correct?

• A. True – but we want

di d h dinner and a show included

• B. False

0% 0%

A. B.

0% 0%

A captive manager's principal goal in life is to A captive manager s principal goal in life is to ensure the tax efficacy of the captive?

• A. True – Yeah right
• A. True Yeah right
• B. False – Yeah right

0% 0%

A. B.

A captive manager is the best person to A captive manager is the best person to read, understand and translate: i t i l t

• i. actuarial reports
• ii. investment manager statements
• iii. state tax law
• A. True

B F l

• B. False

A. B.

0% 0%

It isn't a captive manager's job to bring a It isn t a captive manager s job to bring a captive owner creative ideas on a captive ‐ it i l th i j b t fi i l d is merely their job to prepare financials and assist with regulatory matters? Creative ideas come from brokers.

A True – but don’t tell

• A. True but don t tell

the broker. They are a touchy bunch of nags nags

• B. False – the broker is

the brain trust and the brain trust and should always be consulted

A. B.

0% 0%

What is the expectation for the manager to What is the expectation for the manager to interact with other service providers?

• A. Recommend – in most

cases

• B. Interact – in some

cases

• C. Oversee ‐ rarely

0% 0% 0%

A. B. C.

All risk managers are interested in: All risk managers are interested in:

• a. Other domicile regulations

b l d

• b. Domicile examination procedures
• c. Where the word "captive" came from
• A. True
• B. False
• C. We just want to know

if we are domiciled at the kid’s table or the the kid s table or the adult table?

• D. When doing a

g domicile examination, wear gloves

A. B. C. D.

0% 0% 0% 0%

All managers will say that they are not tax All managers will say that they are not tax advisors and do not offer investment or legal d i h ll h ld k advice; however, all managers should know about Internal rate of return for the parent?

• A. True – most of the

i b h li time…but they lie

• B. False – some of the

time…lying through their teeth

0% 0%

A. B.

0% 0%

All managers should know about tax All managers should know about tax structure of the parent?

• A. True – but only in

i l d simple terms and with many colorful i pictures

• B. False – only if it will

put them in jail

0% 0%

A. B.

All managers should know about NRRA?

• A. True
• A. True
• B. False

0% 0%

T r u e F a l s e

All managers should know about renewal of All managers should know about renewal of TRIA?

• A. True
• A. True
• B. False

0% 0%

T r u e F a l s e

All managers should know about All managers should know about policy/coverage wording?

• A. True – that is what

we are paying for…right?

• B. False – your broker

has a one AE has a one AE deductible if something goes

0% 0%

something goes wrong…right?

A. B.

Can o name the added al e that o r capti e Can you name the added value that your captive manager brings to the RM department?

• A. Timely information
• B. Peer group

performance p

• C. The ability to leap

small buildings in a small buildings in a single bound

0% 0% 0%

A. B. C.

0% 0% 0%

A captive manager can define a return on A captive manager can define a return on investment.

• A. True – using all the

fi h l f fingers on the left hand

• B. False – OK, this is

getting too technical for me…can this panel stop now?

0% 0%

A. B.

A RM's first call in the morning is to the A RM s first call in the morning is to the captive manager. Risk financing is more i t t th i k iti ti d important than risk mitigation and comes before all else.

• A. True – provided

p donuts are provided

• B. False – whatever…
• B. False whatever…

0% 0%

A. B.

0% 0%

A captive's structure is to be continually A captive s structure is to be continually challenged and a captive manager's role is to i k it t d ff thi th t i 't pick it apart and offer something that isn't naturally visible to someone not immersed in the business.

• A. True – unnaturally

visible is usually more interesting

• B. False – kill joy!

A. B.

0% 0%

Captive managers have no say on what sorts of Captive managers have no say on what sorts of changes regulators make and merely act within the rules of a domicile (most associations / the rules of a domicile ‐ (most associations / regulators work directly with managers to d t d h th i t h ld b understand where the improvements should be and what is "cutting edge").

• A. True – the passive

approach not requiring makeup requiring makeup

• B. False – the activist

approach, the kind pp , that gets you on the evening news

A. B.

0% 0%

A captive manager located in one domicile A captive manager located in one domicile

• nly knows about that domicile.
• A. True – they don’t
• A. True they don t

get out much B False – someone has

• B. False someone has

played with my LinkedIn account LinkedIn account

0% 0%

A. B.

Captive management firms don't have any Captive management firms don t have any controls over the financial and regulatory ti i th id th t' reporting services they provide ‐ that's external audit's job.

• A. True – because they

d ’t h th i don’t show us their work to begin with

• B. False – I'm on the

hook for problems

0% 0%

anyway

A. B.

0% 0%

Captive managers are only expected to Captive managers are only expected to understand the insurance program at the level of the captive It isn't important that they are aware the captive. It isn t important that they are aware

• f the risks and business issues facing the parent

company the structure of the complete insurance company, the structure of the complete insurance program in place to mitigate those risks, and how the captive fits in the captive fits in.

• A. True
• B. False
• C. It depends…if losses

have already happened

A. B. C.

0% 0% 0%

This presentation has gone on long This presentation has gone on long enough and everyone wants to go to the bar?

• A. True
• B. False

0% 0%

A. B.

0% 0%