Captive Audiences

We received the news of a New York State Appeals Court decision upholding the ruling that independent insurance agents disclose their commissions to clients in a manner prescribed by the Insurance Department with mixed feelings. First, we did not believe that the lawsuit approach would prevail in New York State, and that the agents essentially were fighting a fight that they had to fight with firm belief that they would prevail, but did so against a tidal wave of legal sentiment that did not augur well for the suit. It was a courageous act with a little bravado thrown in. As it stands, agents will need to make the disclosures originally required under the regulation and will probably, in the long run, be no worse for wear……Former US Senator Alfonse M. D’Amato, Connecticut attorney and insurance expert Thomas F.X. Hodson, and former Superintendent of the New York State Insurance Department Gregory V. Serio have announced the formation of Charter Risk Management Services, LLC, a new full service captive insurance company management firm. Charter Risk will be based in Hartford, Connecticut and cater to captives formed under the new Connecticut captive law recently enacted by Governor Malloy. Charter Risk is a joint venture between Hodson and the risk management firm Compass Company Consultants, LLC, a risk and insurance management firm subsidiary of Park Strategies, LLC. D’Amato and Serio are principals in Park Strategies. Hodson will serve as president and chief executive officer of Charter Risk. Among its first activities, Charter Risk will be serving as administrator of the new Connecticut Captive Insurance Association, a not-for-profit trade association organized to assist in the development of a successful captive insurance market in Connecticut. Hodson, former general counsel at The AIX Group, and grandson of noted reinsurance broker G.L. Hodson, added: “Connecticut will once again be the insurance capital of the United States, and captive insurance companies will help the state achieve this goal. Connecticut has a robust insurance marketplace and is home to many carriers, service providers and, importantly, captive insurance company candidates; we believe the state is poised for great success in this area and we are pleased to be a part of it.” Hodson noted the significant support that has been provided by the state, both in terms of the speed with which the captive law was developed and passed, and the enthusiasm of Connecticut’s Insurance Department and Department of Economic and Community Development to encourage captive insurance companies and captive support services to locate in the state. Serio and Park/Compass colleague Peter J. Molinaro, who will also be part of the executive management team at Charter Risk, are steeped in captive insurance experience. Serio and Molinaro co-authored New York’s captive insurance law and oversaw the first 45 captives licensed in that state as officials at the New York Insurance Department. At Park Strategies, both Serio and Molinaro have been involved in captive development and management. Charter Risk is now seeking regulatory approval as a captive manager in the state of Connecticut…The newly released 2012 Satmetrix Net Promoter Benchmark Study offers interesting insight into customer loyalty leaders within the insurance industry. To measure customer loyalty, the study asked 30,000 U.S. consumers a series of questions, including – “How likely is it that you would recommend (Company X) to a friend or colleague?” The results of this question are then used to determine the Net Promoter score. In the Insurance sector: USAA dominated both the auto insurance sector at 74% and homeowners insurance at 71%; Kaiser stood out again this year with an NPS of 33% thanks to its innovative business model combining insurance coverage with health care delivery in one coordinated service; for life insurance, State Farm led again this year at 28%; most major health insurers had nearly as many detractors as promoters, tallying up an industry average NPS of just 4% (o% if sector leader Kaiser Permanente is not included).