Department of Insurance improves 46%, reduces new hires

SUCCESS-Bridge-LogoUsing the SUCCESS Framework tools and processes, the Department of Insurance’s Captive Insurance Division has enhanced accountability and increased productivity by 46%. On top of that, the division was able to hold off hiring three new FTEs while providing the framework necessary to justify any future personnel requests and technology investments. Above all, the SUCCESS tools have allowed the captive insurance team to collectively focus on critical functions and assist Utah in maintaining its leadership standing in the global captive insurance world by efficiently serving stakeholders with well-trained professionals.

In 2003, the Utah Legislature passed the Captive Insurance Companies Act and created the Captive Insurance Division. The division regulates captive insurance companies—insurance companies established and owned by a non-insurance parent company to insure risks for which the parent company is exposed. Over the past seven years, the number of captive insurers that call Utah home has grown 26%, year over year, making Utah the second largest captive domicile in the U.S. and the fourth largest in the world.

The Captive Insurance Division’s SUCCESS development process was complex and included combining three primary functions: financial analysis, examinations, and licensing in addition to other activities such as processing dividend requests and capital exchanges to account for seasonal workflows. It was also critical to address retention issues by incorporating education, experience, and training of the highly specialized financial professionals that make up the nine-person captive team.

Working closely with GOMB, the team developed multiple weighted inputs for the SUCCESS numerator and identified the tasks associated with each function. Checklists were developed to create a better sequential workflow and to eliminate distracting information not utilized. Time studies were performed and procedures were reviewed to formulate best practices and create efficiencies. As a result, processes were adjusted to eliminate duplication of documents and procedures.

Some of the adjustments involved structural changes within the division. An audit manager position was created to relive a bottleneck of approvals when the director was unavailable. GOMB helped to validate the assumption that the team’s output would increase by adding an administrative position to do scheduling, compile file information, make travel arrangements, and complete other tasks that did not require specialized financial training.

During the 2015 legislative session, the team worked with legislators to make changes to the required examination schedule. The captive code portion of state statute was changed to align with the traditional insurance company exam schedule, allowing the commissioner discretion to conduct financial exams on a five-year rather than a three-year cycle. This change has significantly decreased the overall time required to conduct an exam while maintaining the authority to conduct more frequent exams as needed. 

Commissioner Kiser approved a modest investment in technology and, by working with DTS; a new tracking system for licenses, financial analysis, and event approval requests has been developed. In addition, a simplified and more cost effective annual filing system was created on the website for the completion and submission of the required annual statements and other functions. The captive team is now in the process of developing an online application and file transfer portal for the secure submission of required forms in multiple formats. The utilization of these technological improvements created efficiencies for stakeholders and enhanced Utah’s competitive advantage over other states.

Congratulations to the captive insurance team for their dedication, hard work and efforts to improve performance: Commissioner Todd Kiser, Travis Wegkamp, Deputy Commissioner Brett Barratt, Pamela Sanchez, Heber Beddes, Steve Price, Kodie Peme, Director David Snowball, Laura Shepherd, Mark Weideman and Grace Reinhart.

Insurance Staff