Managing Risk – The Ministry of Gencon and ARM – Part 1

During 2020, one of my goals is to help our readers better understand two incredible companies which our denomination owns. Although many members are unaware of them, these entities allow our worldwide mission to move forward. These companies exist because our church has risk. The two companies are the Gencon Insurance Company of Vermont (GICV) and Adventist Risk Management, Inc (ARM). Managing that risk is the responsibility of all of us as part of ministry. My hope is that by understanding GICV and ARM better, you will feel a sense of ownership in the success of these companies and the ministry of the church.
 

GICV is a captive insurance company domiciled in the state of Vermont. What does this mean? A new colleague recently said the first time he heard the words ‘captive in Vermont,’ he wondered if he should contact the authorities! While it sounds like an odd term, a captive insurance company is simply a registered and regulated insurance company that insures the risks of its owners. In the case of GICV, it is owned by the General Conference Corporation. It only provides insurance to organizations of the Seventh-day Adventist Church.

Captives are a tool that many organizations use to manage risk. According to the National Association of Insurance Commissioners in 2018 there are over 3,822 captive insurance companies compared to 5,965 insurance companies based in United States.

Organizations like our denomination form a captive because it:

• Allows the member organizations to pool resources (through insurance premiums) and access that money to pay claims. This means church money stays in the organization to serve the church.
• Allows for financial planning by a church organization for sudden and unexpected loss. Church organizations are primarily focused on ministry and invest money into them. However, this business model often does not allow for unforeseen expenses that can arise from claims.
• Allows for consistency of tailored coverage across the organization to assist in preventing gaps in coverage.
• Allows for peace of mind by church organizations that their regulated captive insurance company is financially stable versus some areas of the insurance market that are unregulated.
• Allows for the member organizations to choose to provide insurance for hard-to-place risk, for example, property insurance in hurricane/typhoon prone areas, and sexual misconduct coverage.
• Allows for member organizations to be part of the risk management process. Each church organization has an ownership stake in the success of GICV if we all make risk management and the prevention of loss part of our ministry planning. This helps to control our insurance cost, leaving more money for ministry.

Like any other captive, GICV is a tool to assist member organizations in the area of insurance. Each one of you has a vested interest in the success of GICV, your most significant contribution to the success in integrating risk management and prevention in your ministry.
Fires, wind, twisted ankles, and lawsuits will continue with or without the Gencon Insurance Company of Vermont. However, our church has an asset that supports our ministry in many ways. Thank you for your support of GICV through risk management and prevention. You can find many resources to help you prevent and manage risk at www.adventistrisk.org.
 
 Reference
https://content.naic.org/cipr_topics/topic_captive_insurance_companies.htm