When actuary Greg Fears attended a Western Region Captive Insurance Conference in April, he expected to learn and share information about emerging uses of captives for commercial risks, including trucking captives—a recent focus of his attention.
Executive Summary
With the state of Utah opening up the prospect of allowing homeowners to control their own insurance destinies through association captives, at least one analyst has suggested that captives could pose an existential threat to personal lines insurers at a time when there is public backlash against an industry forced to increase prices and exit disaster-prone areas to stay afloat. While captive experts aren't ready to endorse that prediction, they agree that the Utah law change could help some California residents in high-valued homes find coverage for wildfire risks that is currently unattainable in distressed areas.But during the last session of the conference, Fears, a director and consulting actuary for Pinnacle Actuarial Resources, heard something he hadn’t heard in his 20-plus years of captive advisory work. When Utah’s representative spoke up at that final panel, consisting of a group of regulators reporting new developments in their state, Utah’s captive director said his state passed legislation to allow homeowners associations to form captives.
Fears checked the law after the session. As of May 1, 2024, Utah Code Section 31A-37-202 states that “if approved by the commissioner…an association captive insurance company that satisfies the requirements of this chapter may provide homeowners insurance.”
