MONTGOMERY, AL — The Automotive Aftermarket Association Southeast (AAAS), a regional association representing the automotive aftermarket in Alabama, Georgia and Mississippi, has created Alabama’s first captive insurance company.
The company, called Chantilly Risk Management, was licensed by the Alabama Dept. of Insurance under legislation enacted in 2006 and signed into law by Gov. Bob Riley. 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.
AAAS Chairman of the Board Bill Lewis of Greenville, AL, stated "The creation of our captive gives us a tool and options never before available to us. We intend to fully explore these options and offer new and innovative approaches to meeting the insurance needs of the automotive aftermarket industry in our area. Chantilly Risk Management has already proven very valuable to our organization. It was a major factor in the announcement of a rate hold in our self-funded group health program going into 2007. The captive also put us in a position to hold the line on reinsurance costs for 2007 in our self-funded workers compensation program. This increased efficiency means stronger dividends and savings to our members in that program. We are very proud to be the first to establish a captive in the state of 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.”
