A session at theVermont Captive Insurance Association annual conference earlierthis month had the audience chuckling and ended the conference on alight note.

Derick White,president of Strategic Risk Solutions Vermont, and former directorof captive insurance for the State of Vermont, presented a workshopcalled “Toolbox Talk: Top 10 Ways You Know Your Insurance Companyis in Trouble.”

The DavidLetterman-style presentation was fun and informative, especially ata time when risk managers—being grilled by their boards about thesolvency of their insurers—are becoming detectives, looking waybeyond ratings.

And so, withoutfurther ado, here is Derick White's Top-10 list:

#10—Asset Page ofthe annual statement is stamped “NONE.” #9—“Pure” premiumis corrupt.

#8—Risk BasedCapital is so low, it's lower than half Len's golf handicap! [LenCrouse is Vermont's former deputy commissioner of captive insuranceand evidently has a high golf handicap.]

#7—Company receivespermitted practice to use white paper on its annual statement coverto save on yellow ink costs!

#6—The broker feelssorry for the company and returns his commission…so does theattorney!

#5—Schedule P losstriangles are now trapezoids.

#4—Board membersdouble up at the Red Roof Inn for the annual meeting.

#3—Net WrittenPremium is greater than Gross Written Premium.

#2—Loss reservesare so far off that Bornhuetter has stopped talking to Ferguson[Bornhuetter-Ferguson method for loss reserving].

And the #1 way youknow your insurance company is in trouble…

Schedule D lists scratch-offtickets!