The landscape for the alternative risk-transfer market is both exciting and perilous, as interest in ART continues unabated for "traditional" captives of single parents and associations–used for ever-expanding transactional and market gap needs.
Association captives have shown tremendous growth, particularly for construction and health care risks. Although this growth is helpful for commerce, it is apparent that regulatory and tax structures are struggling to deal with it.
Over the past few months, the U.S. General Accountability Office has weighed in on risk retention groups, the Internal Revenue Service has requested comments on four specific areas of risk finance, and the National Association of Insurance Commissioners has held several discussions about proper regulation. While these are all worthwhile and challenging issues, they all will change the face of risk management–some with unintended consequences.
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