A mid-sized company known for its specialty concrete work throughout the greater New York City metropolitan area, RC Structures of Syosset, is opening a captive insurance entity in Connecticut, bringing the state”™s captive market to 10 licensed insurers.
The company cited controlling costs as the factor driving the move. A captive insurer is an insurance company organized and owned by a parent company to manage owner”™s risks and control insurance costs. According to the state Department of Insurance, “Once an alternative to the commercial insurance market, captives have evolved into strategic financial vehicles used for many different enterprises, such as manufacturing and health care.”
Insurance Commissioner Katharine L. Wade made the announcement. The new captive is to be called RCX Insurance Co.
“RC Structures could have chosen nearly 40 others states to establish their captive business but the specialized workforce here in the insurance capital and the department”™s regulatory expertise made Connecticut the perfect fit,” Wade said. “When a company establishes a captive it is essentially creating its very own insurance company that helps manage risk and control insurance costs.”
“The Department works with businesses of all disciplines and sizes to help control costs through the creation of captives that are well managed and sustainable,” said Janet Grace, program manager for the department”™s Captive Insurance Division. “Our consultative approach to helping firms explore and license captives as part of strategic risk management is attracting businesses both in and outside Connecticut to domicile their captive here.”
Jason Giessel, owner of RC Structures, praised the department”™s thoroughness and efficiency in handling his company”™s application.
“The speed at which they responded and the insightful questions the department asked convinced us that we made the right decision in choosing Connecticut,” Giessel said. “As a result of the expert collaboration from the department, I feel very confident that our captive insurer will be a very effective management tool for our entire operation allowing us to remain competitive and grow our business.”
The department”™s Captive Division was formed as a result of Gov. Dannel Malloy”™s 2011 legislation and passage by the General Assembly. In a statement, the Insurance Department said the law “strengthened the state”™s outdated captive insurance law.”
Speaking in a joint statement released by the Insurance Department, state Sen. Joseph Crisco, D-Woodbridge, and state Rep. Robert Megna, D-New Haven, co-chairmen of the Legislature”™s Insurance and Real Estate Committee, said, “Connecticut has the optimal workforce and insurance know-how to continue to grow this segment of the economy and keep Connecticut competitive. Ensuring that our statutes keep pace and provide the latest in regulatory tools is of paramount importance. We are committed to making certain that policymaking reflects that. That’s why the legislature introduced and approved captive insurance.”
The Connecticut Insurance Department recovers an average of $4 million yearly on behalf of consumers and regulates the industry by ensuring carriers adhere to state insurance laws and regulations and are financially solvent to pay claims. Its annual budget is funded through assessments from the insurance industry.
