Expert Ryan Ralston outlines captive insurance benefits for Kansas economy

In a recent meeting of the Kansas Senate Committee on Financial Institutions and Insurance, discussions centered on the potential for expanding captive insurance regulations in the state. Captive insurance, a form of self-insurance where a company creates its own insurance subsidiary, has been gaining traction in other states, but Kansas has lagged behind in adopting favorable regulations.

Ryan Ralston, an expert in captive insurance and president of Elevate Risk Solutions, presented to the committee, highlighting the economic benefits of enhancing Kansas's captive insurance framework. Ralston, who has extensive experience in the field, emphasized that many Kansas businesses currently seek captive insurance options in states like Tennessee and Oklahoma due to the lack of supportive regulations in their home state. He noted that Kansas could capture significant economic activity by allowing local companies to establish captives, which would keep insurance premiums and associated jobs within the state.

Ralston pointed out that the captive insurance market is projected to grow substantially, potentially exceeding $100 billion by 2036. He argued that improving Kansas's regulatory environment could attract more businesses to utilize captives, thereby fostering economic growth and job creation. Captives not only provide companies with the flexibility to design their own insurance solutions but also enhance risk management practices by allowing firms to retain profits from good loss experiences.

The committee's discussions also touched on the differences between captive insurance and traditional self-funded insurance plans. Captives can encompass a broader range of insurance products, including property, casualty, and workers' compensation, allowing companies to consolidate their insurance needs into a single entity. This consolidation could lead to more efficient use of funds and better financial outcomes for businesses.

As the committee considers legislative changes to facilitate the establishment of captives in Kansas, the potential for economic development and job creation remains a key focus. The meeting underscored the importance of modernizing regulations to keep pace with other states and to support local businesses in navigating the increasingly complex insurance landscape. The next steps will involve further discussions on proposed legislation aimed at making Kansas a more attractive destination for captive insurance.