A.M.BestTV: Captives Concerned By Federal Home Loan Bank Proposal

OLDWICK, N.J.--()--In this episode of A.M.BestTV, the Federal Home Loan Banks’ (FHLBank) proposal to eliminate captives from the system is causing concerns among captives and an increase in captives hoping to join the system while they still can. Click on http://www.ambest.com/v.asp?v=fhlba815 to view the video program.

There are 12 FHLBanks spread across the country. These government-sponsored institutions provide on-demand, low-cost funding for things like home mortgages, small businesses and economic development. The Federal Housing Finance Agency, which regulates the FHLBanks, put a temporary moratorium on captives joining the system, and is considering banning them altogether. Frank Klimko, BestWeek’s associate editor, explains that the agency felt that some companies were using the system as a loophole to obtain financing that they weren’t entitled to.

Numerous captive regulators expressed concern about the changes at the Vermont Captive Association 2015 Annual Conference. Delaware’s Captive Insurance Director Steve Kinion said the FHLBanks provide a tremendous amount of liquidity in times of need. “We, as captive insurance regulators, and in terms of solvency, look at that very, very favorably,” he said.

People who appear in this episode include:

  • Steve Kinion, Director of the Bureau of Captive and Financial Products, Delaware Insurance Department; and
  • Maria Sheffield, Captive Program Manager, Missouri Department of Insurance.

Recent episodes of A.M.BestTV include:

  • Blue Marble Explores New Approach to Microinsurance: Eight insurance organizations have teamed up to form a new microinsurance incubator aimed at bringing insurance to less-served markets: http://www.ambest.com/v.asp?v=marble815.
  • U.S. Health CO-OPs Struggle With Viability Issues: A.M. Best Assistant Vice President Sally Rosen and Senior Financial Analyst Wayne Kaminski highlight the challenges The Consumer Operated and Oriented Plan (CO-OP) Program is facing as it enters into its second year: http://www.ambest.com/v.asp?v=coops815.
  • The Unique Risk Exposures of Private Companies: Experts on coverage for private companies discuss risk issues faced by insurers that write directors and officers’ policies, employment practices and related covers: http://www.ambest.com/v.asp?v=private815.
  • Actuaries: Consider The Reasons When Forming a Captive: The final day of the annual Vermont Captive Insurance Association Conference, a panel of actuaries reviews the path from idea to captive start-up, including why sponsors might consider captives and it sometimes may not be the correct solution: http://www.ambest.com/v.asp?v=vcia3815.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Lee McDonald, 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com

Contacts

A.M. Best
Lee McDonald, 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com