The Alabama Department of Insurance has licensed its first captive insurance company under legislation enacted in 2006 and signed into law by Gov. Bob Riley.
Chantilly Risk Management, which is located in Montgomery, is the creation of Automotive Aftermarket Association Southeast.
The legislation came at the recommendation of the Hurricane Insurance Issues Task Force, which was formed after Hurricane Ivan in 2004. The original intent was to offer coastal businesses and condominium groups the opportunity to form small insurance companies to insure their risks.
The additional benefit of the legislation was to offer a limited-tax, limited-regulation marketplace above self-insurance to a wide range of commercial enterprises.
“We are seeing several condominium groups in the research and planning phase of forming captives,” said Alabama Insurance Commissioner Walter A. Bell. “We look forward to licensing new captives this year.
“The wonderful thing about Chantilly Risk entering Alabama’s marketplace is that an organization that needed the benefits of a captive did not have to go to another jurisdiction to find it. Captives provide a sound foundation for associations and businesses to insure or reinsure their risks. We are pleased with Chantilly Risk’s decision to begin business and operate in Alabama.”
The president and CEO of Automotive Aftermarket Association Southeast said the ability for his organization to recoup insurance dollars as a reinsurer of its own risk made sense to his board of directors.
“Our objective in establishing the captive was to take some of the volatility out of the reinsurance market and to recapture some of the dollars being spent for this coverage,” said Randal Ward, who also runs Chantilly Risk. “The captive helps us maintain and solidify our highly competitive member benefit programs already in place. Beyond that Chantilly Risk puts us in a position to consider new and creative approaches to meeting our member’s insurance needs.
“We are very appreciative of the great cooperation and support we have gotten from Commissioner Bell and the great people at the Alabama Department of Insurance. Our board of directors always saw passage of the legislation enabling the creation of captives here in Alabama as a great opportunity and a very progressive step for our state. We are truly excited at the opportunities it presents our association.”