D.C. Grants Second Captive License

By Caroline McDonald

NU Online News Service, Jan. 31, 10:35 a.m.EST?The Washington D.C. Department of Insurance andSecurities Regulation said it has licensed Columbia GroupInsurance, Inc., a pure-captive insurance company, as the secondcaptive for the District.

CGII's sponsor, Columbia Group Insurance Trust, is being formedto provide commercial insurance coverage to USA-IT, Inc., AmericanConstruction and Engineering Services, Inc., Premier Management andConsulting, Ltd.

The department said that others getting coverage through the newcaptive include several real estate limited partnerships, which areaffiliated to the sponsor company CGIT through common ownership,beneficial ownership or control, according to the Department ofInsurance and Securities Regulation.

CGII intends to issue corporate reimbursement policies,difference in conditions policies and professional liabilitypolicies to these entities in an effort to provide coverage forexposures that are either uninsured or excluded under the insured'scurrent traditional insurance program, the department said.

The District's first captive, American Captive Corporation, awholly owned subsidiary of NCRIC, Inc., which is a medicalprofessional liability insurance company, is a sponsored captivelicensed in April, 2001.

Though neither of the captives are association captives, theDistrict's focus is still on trade associations in the D.C. area,said Kathryn Westover, captive advisor to the D.C. Department'sCaptive Insurance Division.

The Department, she said, is actively meeting with associationsto "see how they can help them use captive insurance to betterserve their membership."

The response so far, she said, has been "very excellent. They'vehad some meetings with a professional association of tradeassociation executives and they are beginning to look at developingstructures that can help association members manage, not onlyproperty-casualty risks, but also employee benefit risks."

A captive insurer is a form of self-insurance in which acorporation or association organizes an insurance subsidiary toinsure itself or it's members. Captive insurance companies servethe insurance needs of the parent organization without theuncertainties of commercial insurance availability and cost.

Washington D.C. Commissioner of Insurance and SecuritiesRegulation Lawrence Mirel said, in a statement, that his Department"is pleased to license the first pure captive insurance company inthe District of Columbia.

"The Captive Act of 2000 opened the door to the Districtbecoming a viable captive domicile. With CGII and other captivesslated to come on board in the next year, we see captives as anopportunity for the District of Columbia to diversify its economicbase."