Mon / Feb 13
The CSAC Excess Insurance Authority (EIA) has formed a captive insurance company, Excess Insurance Organization, Inc. (EIO) which began operations July 1, 2016. The formation was over a year in the making, and has been established to provide both short and long term objectives for the EIA.
According to Mike Fleming, EIA Chief Executive Officer, “The EIA’s existing programs will benefit from a complete risk transfer of corridor risk to the captive, have an enhanced investment program with the goal of additional investment income, and provides a superior risk transfer mechanism when multiple program’s risks are comingled.”
Scott Schimke, EIA President of the Board said, “I’m proud to be a part of an organization that is forward thinking, and with our economies of scale, able to capitalize on this risk management opportunity, that will benefit our members now, and for years to come.”
To understand the economies of the EIA, Fleming stated that the EIA has total assets of approximately $650M, including $150M in net position. By investment policy, the captive will invest only a portion of their portfolio in risk assets, and it is this portion of the portfolio that may realize the benefits of investments that a captive insurance company may participate in.
The Captive will be domiciled in Utah, and the Board is made up of current EIA Board, Committee, and staff members along with EIA General Counsel and Utah Counsel. Existing EIA staff will provide in-house management of the Captive including accounting, payment of expenses, and interface with regulators.
The EIA is one of the largest member driven joint powers authorities in America. Founded in 1979, the EIA currently offers 10 major insurance and numerous miscellaneous coverage programs, and membership includes 95 percent of California counties, 60 percent of cities as well as educational, special district organizations, and other public agencies.