Research Studies: Request for Proposals Healthcare Insurance/Reinsurance Captive Landscape
Background and Purpose
Until recently, the placement of healthcare coverage risk in captives was rare, and those captives that carried healthcare risk were generally in Bermuda, Cayman or other traditional offshore captive domiciles. In recent years, more and more entities taking risk on healthcare costs have been exploring the value of placing portions of that risk into a captive insurer or reinsurer, including employers, insurers, and healthcare providers. The increased utilization of healthcare insurance/reinsurance captives (“healthcare captives”) has also expanded the breadth of captive domiciles, with many of these captives being formed in U.S. onshore domiciles.
The purpose of this research is to examine the evolution of the use of healthcare captives for managing risk, how the landscape for healthcare captives is changing, captive structures utilized, and methodology for evaluating and selecting a jurisdiction. In addition to providing a resource to help healthcare insurers and other entities manage risk, the research can be used by policymakers to assess the impact of healthcare captives to existing insurance industry regulation and requirements.
Research Objective
The Reinsurance Section is seeking researchers to perform research into the healthcare captive landscape. The researchers will review existing literature, regulations, publicly available information of recent transaction data and other information; survey/interview regulators, companies, or captive associations; use subject matter expertise; and other methods to complete the study. The following are examples of proposed topics that may be addressed:
- Evolution of the use of healthcare captives.
- Current market and trends for each captive jurisdiction with discussion/estimates of future market growth.
- Requirements in establishing a healthcare captive.
- Summary of similarities and differences of the requirements in the various healthcare captive jurisdictions.
- Considerations for healthcare captive owners in selecting a domicile.
- Current and possible future insurer, reinsurer, and regulator considerations in setting up a healthcare captive.
- Lessons learned in establishing healthcare captives.
- Other pertinent information in establishing healthcare captives.
Note that the list above is not meant to be exhaustive but merely examples of proposed topics that may be researched.
Results of the research will be summarized in a report to be published on the SOA website and inform the reader at a minimum of:
- Prevalence of various captive domiciles,
- Relative growth of various captive domiciles,
- Requirements and regulatory environment of the various domiciles,
- Criteria used by captive owners and their advisors to evaluate various domiciles, and
- The types of captive coverage structures used.
The report will also include quantitative elements that show direction and magnitude to support any of the more qualitative analysis.
A project oversight group will work with the researcher to finalize the offshore jurisdictions to be examined and provide other guidance to the researchers as needed
Proposal Requirements
To facilitate the evaluation of proposals, the following information should be submitted:
- Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
- An outline of the approach to be used (e.g. literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis.
- A description of the expected deliverables and any supporting data, tools or other resources.
- Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
Please note that as a policy, the SOA Research Institute generally does not provide funding to cover academic institution overhead expenses.
As a guide for developing the project budget, please review the Historical Project Cost Guide (see Appendix) - A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The Reinsurance Section is interested in completing this project in a timely manner. Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
- Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
Selection Process
The Reinsurance Section will appoint a Project Oversight Group (POG) to oversee the project. The [sponsoring entity/POG] is responsible for recommending the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the POG will make the final recommendation, subject to Society of Actuaries Research Institute (SOA) leadership approval. An SOA staff research actuary will provide staff actuarial support.
Questions
Any questions regarding this RFP should be directed to Research-HCCT@soa.org.
Notification of Intent to submit Proposal
If you intend to submit a proposal, please email written notification by June 5, 2024 to Research-HCCT@soa.org.
Submission of Proposal
Please email your proposal to Research-HCCT@soa.org; proposals must be received no later than June 14, 2024. It is anticipated that all proposers will be informed of the status of their proposal by the end of June 2024.
Conditions
The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries Research Institute and the researcher.
The Society of Actuaries Research Institute reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The Society of Actuaries Research Institute also reserves the right to redirect the project as is deemed advisable.
The Society of Actuaries Research Institute plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).
The Society of Actuaries Research Institute may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the [Society of Actuaries/sponsoring entity] in publicizing or promoting the research and responding to media requests.
The Society of Actuaries may also choose to market and promote the research to members, candidates and other interested parties. You agree to perform promotional communication requested by the Society of Actuaries Research Institute, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.
Conflict of Interest
You agree to disclose any of your material business, financial and organizational interests and affiliations which are or may be construed to be reasonably related to the interest, activities and programs of the Society of Actuaries Research Institute.
Appendix
The cost ranges below are intended as a guide for budgeting project costs for proposals in response to SOA Research Institute Request for Proposals (RFP). Please note these figures span the 33rd to 66th percentiles for all projects as well as projects that involve a specific approach (lit review, survey, etc.). They are based on historical costs over several recent years. Expected costs for some RFPs may fall outside these ranges depending on the nature of the work and resources required for completion.
All Contracted Projects
This category includes all contracted projects that the Institute has undertaken within the last several years.
The 33rd-66th percentile project costs range is $25,000 - $50,000.
Literature Reviews
This category includes projects that involved only a literature review or the cost for the portion of a larger project that included a literature review.
The 33rd-66th percentile project costs range is $15,000 - $20,000.
Surveys
This category includes all projects that had a survey as their primary component.
The 33rd-66th percentile project costs range is $28,000 - $55,000.