David Ramer and Lance Abbott
BevCap Management
BevCap Management
President David Ramer and programme manager Lance Abbott of BevCap Management discuss why their new cell captive had to domicile in Hawaii
What attracted you to the state of Hawaii?
David Ramer: The move to Hawaii was precipitated by a couple of things. We were domiciled in Nevada from the inception of our captive, and as we started to expand into healthcare, we were under the impression that they would endorse our healthcare cell. Ultimately, they would not support that.
Lance Abbott: Nevada did try to accommodate us, but they just don’t have cell structure. It was frustrating for us, but it was out of Nevada’s control.
Ramer: We had to look for other locations so we could have that cell. Having taken advice from some of our partners we looked at several different states. Hawaii was chosen because of the ease of entry, and the fact that they don’t have premium taxes also made it very attractive. They don’t have an annual meeting requirement like some other states, although we are going to hold a meeting there anyway.
We are in the process of moving our core captive into Hawaii, and so we will be out of Nevada completely.
How has your experience with the Hawaii Department Of Insurance been so far?
Ramer: It has been very good—they have been very receptive. They like the captive concept. We’ve had our hiccups, but overall they are very receptive to our group.
Abbott: I had a chance to meet with Sanford Saito, the captive examiner in Hawaii, and they have been very business friendly towards us.
They have just sponsored a cell law in Hawaii, which has worked well for us and our programme. We think we will have the opportunity at some point to open some new cells in Hawaii.
Are there any challenges specific to working as part of a group captive?
Abbott: We have been very selective with the members that we have brought into our homogenous group, and they are all, without exception, outstanding business people and run great operations. They approach our challenges from a different perspective, and have been very pragmatic in the way we handle difficulties when they do come up. They are good business people, and when you get folks like that in a room things tend to go pretty smoothly.
Are you open to other distributors joining the captive?
Abbott: We are open for business. We are open to working with new brokers, we have 19 distributors in the programmes that BevCap manages, and we are interested in talking to anyone who wants to know more about what we are doing.
This calendar year, by the end of Q1, our casualty captive will have two new members, as will our healthcare captive. The companies coming on board to our healthcare captive are Tri-Eagle Sales in Tallahassee, and Markstein Sales in the Bay Area. On the casualty side, we have General Distributing in Salt Lake City and Virginia Eagle, in Virginia.
How important is the active involvement of each member in running the captive?
Abbott: All of our members are involved to a different degree. Some members are not hugely involved, but there is a great core group that stays very involved.
Ramer: Every single one of our members, on either side of the captive, is very involved in the day-to-day business of beer distribution. They see first-hand the safety risks, which makes us a much stronger organisation. We have owners and operators sitting in board meetings who are very engaged in their business.
Is BevCap Health large enough to withstand a major claim?
Abbott: We think so. We have a stop-loss policy in place for individual claims, as well as an aggregate stop-loss, so we have been fairly conservative in how we have set it up.
Will Obamacare have any effect on your business?
Abbott: I think Obamacare is one of the things driving the interest in our healthcare captive, because one of the things we are able to do is unbundle the programme. Large service providers typically have everything bundled up, and so there is no cost transparency in there. We have been able to unbundle the different components beneath the black box package.
Because middle-market companies may have 250 employees, on their own they don’t have great buying power.
Together in a captive, they can increase their buying power, and it gives them an opportunity to control what is going on in the healthcare space. We are proud of that, because although we have taken more risk in developing this programme, the level of care that is provided to the employee has been heightened.
Ramer: I agree completely. Most of us are zero-based budgeting companies, so when it comes time for renewal or even the initial, the member knows exactly what that premium is and what the fees are going to be.
