Archive for January, 2014

Self-insurance company in Caymans aimed to decrease costs

Monday, January 6th, 2014

Via Christi Health, the largest nonprofit health care system in Kansas, maintained an insurance company in the Cayman Islands for nearly 20 years.

The company, Sunflower Assurance, was used to handle medical malpractice insurance for the health system, said David Hadley, chief financial officer for Via Christi Health. Now that Via Christi is under the umbrella of Ascension Health, the Cayman Island captive insurance company has been acquired by Ascension.

A captive insurance company is owned by a parent company and is used to insure its own risks.

Hadley said that under federal legislation medical malpractice is to be done through an insurance company, and so that’s the reason for the captive is.

Eric Nordman, director of the National Association of Insurance Commissioners and director of the Center of Insurance Policy and Research, based in Kansas City, Mo, said that such offshore captive insurance companies are common among medium and large organizations – both nonprofit and for-profit – in health care and other sectors.

It should be reminded that, according to the Cayman Islands Monetary Authority (CIMA), the Cayman Islands are the leading jurisdiction for health care captives. In Cayman, 254 companies that focus specifically on medical malpractice liability, as of September. About 90% of all insurance captives in Cayman are for companies insuring risks in North America.