Nancy Bern, SVP, John Hancock
Richard M. Inserra, Asst. Treasurer, Union Carbide Corporation
Gary Matson, Director, Global Benefits, HJ Heinz
Moderator: Mitchell J. Cole, Principal, Towers Perrin, New York

Tuesday, November 16th, 10:45 - 12:00 p.m.
 

"Experts Say Soft Market Is Best Time to Form Captive"

H.J. Heinz is among several major corporations that are using their captive insurance companies to facilitate reorganization or consolidation of employee benefits.

As the Pittsburgh-based food processor adjusts to a new chief executive officer--only the sixth in 120 years--it also is reorganizing internationally along product lines that range from baby food to canned tuna.

Noble Insurance, the company's Dublin-based captive, is being expanded to consolidate the employee-benefits programs the company offers its 45,000 employees around the world. Noble was established three years ago to handle the company's property//casualty risks. It recently was expanded to include the employee stock-purchasing plan and the defined-benefits pension plan for employees who transfer frequently among the company's overseas locations. In January, another line--the company's executive deferred-compensation plan--will be added to the captive.

The company also plans to insure its self-funded health plans and disability programs in the captive, Gary Matson, director of global benefits, said Tuesday during the Ninth World Captive and Alternative Risk Financing Forum.

If a company plans to move employee benefits to a captive, a good working relationship between the risk-management and human resources departments helps, said Richard M. Inserra, assistant treasurer for Union Carbide Corp.

Union Carbide is using its captive to insure a new employee-benefits package. The company recently developed a voluntary personal lines program through Travelers Group that includes automobile, homeowners and jewelry. Employees receive discounted rates, and Union Carbide takes on 100% of the risk by reinsuring it all into its captive, Inserra said.

Captives also are being used as companies integrate their workers' compensation and disability coverages, said Kathryn Westover, chief operating officer of ARS Management. Such arrangements require U.S. Department of Labor approval.