Captive Insurance: The Overlooked Tool Every Lawyer Needs to Understand

Victoria Fimea | Arizona Department of Insurance and Financial Institutions

Captive Analyst for the Arizona Department of Insurance and Financial Institutions. She is an attorney with over 35 years of insurance and public affairs advocacy experience, including over 20 years in C-suite and senior level positions. Her extensive captive insurance experience includes serving as a Senior Vice President with an alternative risk provider where she managed the regulatory, claims, underwriting and captive formation departments, and as a Senior Vice President and General Counsel in the life insurance industry forming captive insurers for reserve financing transactions. Ms. Fimea spent several years in Washington, D.C., with a major national insurance trade association. Ms. Fimea volunteers at Northern Arizona University (NAU) to grow its RMI (Risk Management and Insurance) certificate program at The W.A. Franke College of Business, and she is an Adjunct Professor at NAU, teaching the senior year capstone course for NAU’s RMI certificate program. Ms. Fimea has a B.S. from NAU, her M.A. from The American University School of International Service, and her J.D. from The American University Washington College of Law. She is admitted to the Bars of Arizona, California, the District of Columbia and Illinois. Ms. Fimea is the 1981 Truman Scholar for the State of Arizona.

David Beyer | Alaska Air Group

Mr. Beyer has served as the director of risk management for the Alaska Air Group (Alaska Airlines, Hawaiian Airlines, Horizon Air, and McGee Air Services) since 2010. He is also board chair, general manager, and corporate secretary of Alaska’s Hawai’i-based captive insurance company, ASA Assurance, Inc. Mr. Beyer just finished a 6-year term on the Board of Directors of the Hawai’i Captive Insurance Council. He is in his second year on the Board of Directors of Captive Insurance Companies Association and serves on the board of the nonprofit Surfrider Spirit Sessions. He earned both master of business administration and juris doctor degrees from Gonzaga University and is a licensed attorney. He started his journey with Alaska Airlines in 2006 negotiating contracts for goods and services within information technology and supply chain management.

I. Foundations of captive insurance | 1:00pm – 1:20pm

• Defining captive insurance and its role in modern risk management
• Types of captives: Single-parent, group, and risk retention groups
• Business motivations: Cost savings, risk control

II. State regulation | 1:20pm – 1:40pm

• U.S regulation of captives
• Discussion of U.S. domiciles with captive insurance laws
• Licensing requirements, capitalization standards, and regulatory oversight
• Factors that make a jurisdiction attractive for captive formation

III. The $1.5 million threshold and micro-captives | 1:40pm – 2:00pm

• Election under § 831(b) of the Internal Revenue Code
• Annual premium limitation (historically $1.5 million, later increased) and its implications
• Compliance strategies for entities operating under the threshold

Break | 2:00pm – 2:10pm

IV. Formation and governance of captive insurers | 2:10pm – 2:30pm

• Key steps in formation: Feasibility studies, actuarial analysis, and capitalization
• Governance requirements and board responsibilities
• Maintaining arms-length transactions and avoiding “sham” structures
• Role of service providers: Captive managers, attorneys, accountants, and actuaries

V. Litigation and enforcement issues | 2:30pm – 2:45pm

• Common arguments raised against captives in court
• Defense strategies for companies under audit or litigation
• The impact of judicial trends on future captive planning

VI. Risk management and best practices | 2:45pm – 3:00pm

• Ensuring compliance with state and federal law
• Documentation, record-keeping, and transparency
• Structuring captives for long-term viability
• Collaborative strategies between business leaders and legal counsel

VII. Case studies and interactive discussion | 3:00pm – 3:10pm

• Example of a successful captive formation
• Group analysis: Good governance structures for captive insurers