Vermont’s stability through change: Christine Brown has been with Vermont’s captive division for 20 years and in August 2022 stepped up to become the state’s new director of captive insurance. Here, she speaks to Captive Review’s Mark Richardson about the changes within the captive insurance division at the Vermont Department of Financial Regulation and what to expect in 2023.

It was something close to the end of an era when Captive Review Hall of Famer Dave Provost called time on his successful captive career with the Vermont Department of Financial Regulation (DFR) in August 2022.

Deputy commissioner of the captive insurance division since 2008, Provost was a popular leader who took Vermont’s already strong reputation as a captive hub to another level.

Following in these footsteps is a daunting prospect, but in Sandy Bigglestone, the state had a ready-made replacement lined up who had been with Vermont’s captive insurance division since 1997 and director of captive insurance since 2010.

And the same could be said of Christine Brown, who was promoted to Bigglestone’s old role after working in the division since 2003 – the last six years of which as assistant director to Bigglestone. Additionally, Jim DeVoe-Talluto was promoted to the role of assistant director having been with the division since 2004. In every transition, Vermont has recognised the importance of drawing from its own expert staff to lead the domicile.

We had a chat with director Christine Brown to learn more about the transitions and what to expect in the year ahead. With the relentless captive growth the domicile continues to display, it’s understandable that, when talking to Captive Review, Brown is keen to highlight the continuity that herself, Bigglestone and Devoe-Talluto bring to their new roles. Major regulatory overhauls are certainly not on the agenda any time soon.

But that doesn’t mean there isn’t a fantastic opportunity for the team to make their mark on the domicile and implement their own ideas.

“We’ve learned a lot from Dave and as a department have been really successful under his leadership, so why rock the boat?” Brown says. “That said, we all bring a fresh perspective and we’re thinking creatively about ways we can improve our processes and guidance to be the best domicile we can be.”

Modernising

Brown said leadership is looking internally at the structure of the captive division and their processes and procedures to make sure they are doing things in the most effective way possible.

“One long-term goal we have is to better modernise the way we accept regulatory filings like business plan changes and how we process those. We want to make it easier for outside users, while creating efficiencies internally so we can focus our resources less on manual processes and more on analysis of the requests coming in,” she says.

The department also wants to improve communication with Vermont’s captive owners, captive managers and other captive professionals.

“We’re proud to have an open-door policy and continue that culture, but we want to make sure we are doing the best we can to get our messages out there in direct and clear ways,” she notes. “We’ve always issued guidance in writing and have a very formulaic way of doing things, but we’ve realised people are consuming information in different ways today. That’s why we are exploring different ways to get our messages out there to better accommodate the busy schedules of businesses and service providers.”

With better means of communication that reach the broad audience of all stakeholders, Brown says there will be greater clarity on department expectations and best practice.

The department is planning to release updated guidance and tools for topics that they often get questions about, including board meetings, cybersecurity, and business plan change requests.

ESG

Another subject sure to be high on the agenda of captive professionals is ESG.

There is some question around what role regulators should play in ensuring parent companies and captives are taking action to improve their ESG performance.

For Brown, while she does believe companies that take ESG commitments more seriously will be best set up for long-term success, she doesn’t think captive insurance regulators should be adding another layer of requirements at this time.

“We meet with executive teams regularly and what we’re hearing is many parent organisations are keenly aware of their responsibility to take action to address some of these issues and concerns,” she says.

“They are eager to talk to us about some of the initiatives they have implemented, for example, to improve their emissions ratings or how they’re investing in companies with greener ESG scores. I think there’s a lot of social and regulatory pressure to change, it matters in every industry, and the issues are finally starting to get the attention they deserve.”

As things progress, Brown says it is possible the department may issue guidance around best practice in ESG or possibly additional regulatory requirements. For now, though, the department is happy to engage in friendly discussions to ensure captive owners are aware of the issues, and how developing ESG standards and policies can contribute to longer-term financial security.

Next generation

What Vermont is taking immediate action on is the slowly looming talent crisis that could threaten the industry if steps aren’t taken to bring on the next generation of captive professionals.

Together with Brittany Nevins, captive insurance economic development director at the Vermont Department of Economic Development, Vermont staff and service providers in the region have been promoting the captive industry in local colleges and online in various ways, such as creating a webpage with more information about the captive industry as a career path.

Vermont is working closely with the Vermont Captive Insurance Association (VCIA) to elevate the expertise of emerging leaders and provide more support to young and new captive insurance professionals.

As leaders of the industry in the US’ largest captive domicile, Brown thinks they have a responsibility to play their part in protecting the captive sector’s future. “We’re very focussed on getting the word out about captive insurance, that it’s not just a boring insurance job,” she says. “There’s so much to learn and so many different avenues you can take with a career in captive insurance. It’s an exciting and rewarding career, always at the cutting edge of emerging risks and innovative solutions. That’s the broad message we want to get out there.”

Movements to get more young people into the industry have happened piecemeal across the Vermont industry, but Brown says the current Vermont leadership wants to lead a more sustained and intentional effort at attracting the next generation.

In Vermont especially, Brown says most students know nothing about the thriving industry on their doorstep and that they don’t have to leave the state to have successful careers.

“The key is understanding what the next generation needs to enter the industry and stay in the industry,” she says. “We’re trying to show them there are many opportunities for fulfilling, well-paid and environmentally friendly jobs as captive insurance professionals right here in their own backyard.”

Reputation

Vermont’s leadership role in these types of industry initiatives, as well as its status as the world’s largest onshore domicile, means it is also held up as a beacon by other domiciles looking to emulate their success.

Regulators from across the US come to the annual VCIA conference and Brown says the department is interested in supporting the success of the broader industry. However, maintaining this leading reputation can also carry its own pressures.

She understands that while maintaining continuity post-Provost is the right move in the immediate term, longer term she and the team will have to adapt to changing conditions.

“Sandy, Jim and I have always been proactive in how we regulate. We have a culture in the DFR of looking towards the future and making improvements to meet industry needs in real time,” she says.

“We’ve been doing that throughout our 40-plus-year history. Sandy is an amazing leader and the best person to lead the Vermont captive division to continue this great work.”

When it comes to knowledge-sharing, she says this benefits the industry at large and thinks the more competition there is, the more innovation in regulation it can promote.

Brown expects more captive growth around the world in 2023 following on from a very good last few years for the industry. Vermont licensed 41 new captives in 2022, which took its total number of captives to 639. And 2023 has already got off to a fast start, licensing five additional captives by 18 January.

As the hard market continues to bite, Brown thinks Vermont will continue to be an attractive destination for those looking to form a new captive. “We don’t see anything slowing down right now. We still have a very healthy pipeline. We’re having meetings on a regular basis with companies, so I think we will continue to see the same type of numbers for captives licensed,” she says.