Two FEMA announcements on the same day point the same way. At a private conference in Little Rock, FEMA Administrator Cameron Hamilton told state emergency managers that states must build their own financial reserves to handle most disasters without federal help. He said federal disaster aid cuts could come within six months. Also that day, FEMA launched a FloodSmart.gov tool that lets homeowners and renters buy NFIP policies directly, without an agent. An internal FEMA memo dated October 15 had already described the goal of handing disaster response to state and local governments to reduce "federal dependency".
If there was one idea that ran through every room at this year's Global Captive Congress in London, it was this: the captive is no longer the afterthought in a risk program. It is becoming the starting point. Session after session, whether the conversation was about corporate strategy, reinsurance, Lloyd's, or the new UK regime, speakers kept circling back to the same shift in thinking. What follows is my take on the day, session by session, and what I think it means for captive owners and the advisors who work with them.
Insurance is a field where a few misunderstood words can derail an otherwise straightforward conversation. The vocabulary of insurance can often be confusing, terms like attachment, cession, and IBNR get used as though everyone in the room already shares the same definition. Often they don't. This glossary collects the terms that most often trip people up — grouped by what they describe — and defines each in plain English.
The Tennessee Department of Commerce & Insurance (TDCI) has proposed a rewrite of Chapter 0780-01-41, the rules that govern Tennessee captives. A public hearing is set for Oct. 20, 2026, at 9:00 a.m. in Conference Room 1-B, 500 James Robertson Parkway, Nashville.
Every current or prospective captive owner has one simple thing in common. They believe they manage their risk better than the commercial market gives them credit for and wants to retain premium dollars that have previously been burned in the commercial market. While this sentiment is often correct, the need to be insulated from an unavoidable catastrophic loss can be invaluable in protecting the captives balance sheet. Reinsurance is the tool that can limit the catastrophic loss the captive. It determines how much volatility the captive retains, and how confidently the captive can grow into new lines and larger retentions over time. For captive owners, understanding reinsurance is central to how the captive is capitalized and how to confidently sleep at night knowing you aren't one large loss away from insolvency
A captive is not difficult to form, but it is easy to form badly. The value of the vehicle is decided long before the first policy is issued — in the discipline of the questions asked at the outset. Done well, it lets an organization retain the underwriting profit and investment income that would otherwise flow to a commercial carrier, gain control over its cost of risk, and access coverage the traditional market prices poorly. Done carelessly, it becomes an under-capitalized entity holding volatility it was never equipped to absorb. The difference is decided during formation — which is why the process requires disciplined underwriting and evaluation.
A captive is simply a privately owned, licensed and regulated insurance company. These regulated entities can seem complex to those evaluating for the this time. However, coordinating the right team of specialists and an independent advisor is of utmost importance to provide the appropriate structure for the captive owner, eliminate confusion and manage expectations. Understanding each individuals role and where the questions should be directed simplifies this process for the captive owner and broker.
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