It is time to return to our occasional series of Just One Question, but I wanted to take the opportunity of asking the question to also expand my knowledge (and perhaps yours) in an area that I have had little exposure to.
To achieve this, I chatted with Dan Duncan, whose employer, MW Premium Finance Captive Specialists, is a leading player in the area of premium financing for captive insurance companies. Despite my lack of knowledge, Dan was able to distill the business very easily for me. The captive is provided with a loan for the premium, with the loan amounting to around 70-80% of the premium in many cases. That loan is secured by the policy, so that if the borrower defaults on the loan, the policy is cancelled, and the unearned premium is returned to the lender. While this is a very common occurrence in the commercial market usage within the captive arena is an area where continued growth is being seen. Dan explained that for his company, captives are 25% of the business.
The advantages to the captive are mainly around cash flow, the tax advantage gained from the ability to deduct the full expense without having paid the full premium. And the fact that is is an off-balance sheet loan, enabling the potential preservation of existing credit arrangements held by the borrower.
In response to my Just One Question, which was “how does the captive market look to you at the moment”, Dan responded that their viewpoint would match that of the whole industry, they see the traditional market continuing to make pricing and terms decisions that cause an increasing number of entities to explore a captive solution. With their primary markets being in areas including transportation, construction and medical malpractice, they are mirroring the growth seen in those sectors. “For us, it’s also an educational process. As premium finance isn’t central to the creation of a captive, we are out there building and maintaining relationships to show the value that can be obtained.” Overall, Dan remains positive about the trajectory of the captive sector and the role that his organization and premium finance in general can play within it.
Two other important tidbits from this week that you should know about: 1) VCIA and the Vermont Society of CPAs are going to the Burlington ballpark together! Lucky winners from our raffle can take a partner, child or friend and enjoy the fun and relaxing environments of one of the oldest American ballparks in the country. It will also be a great opportunity to deepen VCIA's ties with VT CPAs. Details below. 2) We've launched a Monty raffle, too! This one's bigger than the ballpark outing. We want to drive strong engagement with Monty and to that end if you use our captive expert AI assistant Monty in any capacity, then you can submit your name to win a FREE 2026 conference pass (if member) or 50% of 2026 member (for nonmember). In the spirit of our 40th anniversary, we need 400 submissions before we raffle off the very lucky winners.
