NU Online News Service, Oct. 29, 12:22 p.m. EDT
The Target Markets Program Administrators Association is soliciting program administrators for its Target Markets Insurance Company, a protected cell captive alternative risk option for program administrator errors and omissions risk.
The captive is being developed exclusively for TMPAA membership and was promoted at its 10th annual summit last month in Scottsdale, Ariz.
TMPAA began gauging member interest in a captive early this year and introduced the concept at its midyear meeting in May.
Since then, TMPAA has compiled a list of 14 "early adopters" who will assist in building out the program, said Glenn Clark, president of Delaware-based Rockwood Programs Inc., which will be underwriting the captive.
Members who join the captive will become members of its board of directors, and each will be asked to serve on the board or a committee, such as claims, underwriting or administration, Mr. Clark said.
Spearheading the project is new TMPAA member Breckenridge Insurance Services Inc., which specializes in alternative risk transfer. Other members involved are Milliman Inc., which will handle actuarial services; Ullico Casualty Group Inc., protected captive cell manager; and law firm Wilson Elser, which will oversee defense, claims and risk management services.
Lloyd's of London is the issuing carrier for the program's $3 million in primary limits/$3 million aggregate, with other TMPAA carrier members available to provide excess coverage of up to $10 million.
The captive will be domiciled in Washington, D.C. and available for Jan. 1, 2011 renewals.
Although price will vary depending on coverage, the initial investment is estimated to range between $50,000 and $150,000, Mr. Clark said.
TMPAA founders had always planned to offer members a captive program, he said. "We needed a 'champion' to drive the concept from idea to execution, and Breckenridge filled that gap," he added.
Although the standard insurance market is currently awash in low-priced E&O coverage, captives allow participants to assume a portion of their own risk, giving members more control, Mr. Clark said.
This can result in pricing and coverage stability, as well as long-term cost savings over the course of a period of three-to-five years, he said.
Laura Mazzuca Toops is editor of American Agent & Broker magazine, part of Summit Business Media's Property & Casualty Media Group, which includes National Underwriter.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.