South Carolina Prepares To Beef Up Captive Regulation

South Carolina Insurance Department Director Eleanor Kitzman hasannounced changes to her senior management staff and areorganization that includes the captive insurance division.

Effective immediately, Tim Baker, formerly the deputy directorof administration, is deputy director for market services. Thisincludes the property-casualty, life, accident and health sectionsas well as alternative risk transfer services.

Mr. Baker has been with the department for 16 years in variouspositions, including manager of consumer services and legislativeliaison. The department said it is interviewing for an actuary tomanage the day-to-day operations of the life, accident and healthsection.

Ms. Kitzman told National Underwriter last month that during thepast five years, the captive division has focused primarily onlicensing new companies and evaluating their business plans, but"now that we have 121 captives licensed, they require ongoingregulation," she said.

She continued that the department has not "really developedcaptive-specific procedures" for that purpose.

Ms. Kitzman said her department is adding resources to thestate's captives program to build on its success during the lastsix years. In that period, South Carolina has become thethird-largest domicile for captive insurers in the United States."We intend to continue to be a preferred domicile for captives,"she said.

Ms. Kitzman previously announced that Leslie Jones, who firstjoined the department in 1997 as a life actuary and currentlymanages the ARTS division, would be assuming a new role asexecutive assistant, consulting actuary to the department. Thedepartment is interviewing for a program manager to run theday-to-day operations of ARTS.

Gwendolyn Fuller McGriff will continue as general counsel andhas become the department's deputy director for consumer services,agents licensing and education, and specialty lines. She previouslywas general counsel and deputy director for financial services andthe property-casualty and life, accident and health sections.

The department said Ben Duncan has joined the agency as deputydirector for administration and strategic planning, and willoversee the accounting, human resources and information technologydivisions as well as the budget and strategic planningfunctions.

Ms. Kitzman is interviewing candidates for the position ofdeputy director for financial services and solvency, the departmentsaid.

In announcing her reorganization, Ms. Kitzman said she isfocusing on having the department operate in an efficient andcost-effective manner. She noted that the department regulates acomplex industry and "it is imperative that we have the technicalexpertise to do the job."

Ms. Kitzman was appointed to her post earlier this year by Gov.Mark Sanford, who announced last week that he was forming aWorkers' Compensation Reform Task Force to review the state's compsystem and recommend measures to control a spike in workers' compinsurance prices that rose 11.4 percent compared to an averagenational decrease of 6 percent.

The governor said he asked Ms. Kitzman and Department ofCommerce Secretary Bob Faith to recommend a broad-based group ofbusinessowners, physicians, insurance representatives and attorneysto examine the issue.

He said he was acting in response to a National Council onCompensation Insurance filing for a workers' comp premium increaseof nearly 33 percent.

With 121 captives already licensed, the emphasis is shifting todeveloping specific, ongoing regulation.