Vermont Report: People to Know

Who’s Who in Montpelier

These five domicile stars can help risk managers learn about forming a captive in Vermont.
By: | April 7, 2014 • 9 min read

When you need someone you can trust to fix your car, sell your home, invest your life savings or buy insurance, it helps to know someone. And when you need to form a captive, it helps too.


Who should you know in the No. 1 onshore domicile? The head regulators, key economic development officials and the president of the industry association, for starters. But you don’t have to wait for an introduction. Pick up the phone and talk to them yourselves. Better still, come meet them face to face.

As you explore this important area of risk transfer, these key players in Vermont can and will answer your alternative risk transfer questions and set you on the best captive course.

David Provost

David F. Provost Deputy Commissioner Captive Insurance Division Vermont

David F. Provost
Deputy Commissioner
Captive Insurance Division

When David F. Provost took over as Deputy Commissioner of Vermont’s Captive Insurance Division in 2008, one thing he stressed again and again, during the 1,001 interviews he sat through at the time, was continuity.

“I’m just going to keep on doing what Vermont’s been doing,” he told Risk & Insurance® back then. “It’s going to be a while before it looks like it’s Dave’s Vermont.”

Six years later, no doubt it is “Dave’s Vermont,” and the domicile is still the same steady-as-she-goes, No. 1 onshore home for captives.

“We’ve changed things, but our basic approach is still the same,” Provost said in 2014.

With a quarter-century of experience in captives, first on the business side at Johnson & Higgins, Sedgwick and AIG, then on the regulatory side as an examiner and assistant chief examiner, Provost has come from within the ranks to lead them. So on top of consistency add approachability to the list of qualities that he imbues upon the department. Provost estimates that his office receives calls nearly every day about how to start a Vermont captive. His team takes the call and spends the time to walk prospective parents through the basics, pointing them in the direction of captive managers and feasibility studies.

“We don’t have an answering machine,” Provost said. “You don’t have to press any buttons when you call the phone here.”

Provost himself will field the questions, whether on the phone or in person at an industry event or in individual business meetings. He knows it’s part of the job. Even regulators must wear the marketing hat now and again.

He has his funny memories of interactions — such as the time one prospective captive owner asked how he could solve his company’s $16 billion pension problem with a captive; Provost’s response was to put $20 billion in the captive — and his memorable moments, such as when Bass Pro Shops came to Vermont, a “blast” of a formation because Provost is an angler.

There is also his pride. It shines through when he said about potential owners: “It’s an education process to tell them what some of the benefits are to companies and to society as a whole when you get into some of the niches that captives fill,” he said.

 Sandy Bigglestone

Sandy Bigglestone Director of Captive Insurance Vermont

Sandy Bigglestone
Director of Captive Insurance

Like her boss, David Provost, Sandy Bigglestone climbed nearly every rung on the ladder to reach the director of captive insurance position in 2010. In her 17 years with Vermont, she has served as director of financial examinations, chief examiner, assistant chief examiner, examiner-in-charge and insurance examiner. And like her boss, she said there is no “trigger point,” after which prospective captive owners can contact the Vermont regulators. Reach out any time.

Bigglestone and team are particularly good to contact, though, after a captive has been deemed feasible and a business plan drafted. That is when the famed Vermont face-to-face can occur.


“It establishes a relationship, to meet and shake their hands,” Bigglestone said about the first official (and mandated) meeting between prospective owners and regulators.

Such meetings are much more than just a regulatory requirement; they are beneficial to all. Bigglestone appreciates being able to learn what the parent company is all about, business-wise and value-wise. For parent companies, it’s an opportunity for risk managers and financial executives to look Bigglestone and the other regulators in the eye. It’s also a chance to appreciate the regulators as individuals, as well as see their collegial teamwork in action.

“Obviously, I have had a great run working with several excellent colleagues in the 17 years that I’ve worked for the state,” Bigglestone said of her team.

For about a dozen of those years, she’s worked with Provost. And what a combination they must be to see in action, chatting about the intricacies of the Vermont captive law, the one oft copied but never quite duplicated. Better yet, be the fly on the wall for discussions about two of their other favorite topics — craft beer and CrossFit training.

 Dan Towle

Dan Towle Director of Financial Services Vermont Agency of Commerce and Community Development

Dan Towle
Director of Financial Services
Vermont Agency of Commerce and Community Development

As director of financial services for Vermont’s Agency of Commerce and Community Development since 1998, Dan Towle is one of the most familiar faces of the Vermont captive industry. And as perhaps the industry’s top advocate and chief marketer, he creates goodwill that’s recycled in a virtuous cycle.

“It allows us to focus on what we do best, which is regulating,” explained Bigglestone. “And the better we are at regulating, the easier Dan’s job is.”

But Dan is not just the Vermont salesman. He also can serve as shepherd. Often, interested would-be owners inquire directly to him about forming a captive.


“Very often companies do not know if what they are trying to accomplish is feasible with forming a captive and how to accomplish putting it together. They often need to be pointed in the right direction,” Towle said.

As someone who has been on staff during the licensing of more than half of the 1,000 current captives, Towle knows where to direct them. A few big-name regulators have come and gone in his day, a VCIA president or two, but Towle knows their replacements and is confident in their competency.

“I think we have continued to build upon the depth and breadth of our team in Vermont. We have never rested on our laurels,” he said. “We have a great team and we enjoy the challenges of coming up with solutions for the benefit of our captives and our industry.”

 Richard Smith

Richard Smith President Vermont Captive Insurance Association

Richard Smith
Vermont Captive Insurance Association

Richard Smith has steered the Vermont Captive Insurance Association (VCIA) as its president since 2009. He came to advocacy for captive owners after years working in state government, most recently as deputy commissioner of the State of Vermont’s Public Service Department and policy analyst in the Office of the Governor. It’s that background in government that helped him earn the position in the first place, but it’s also perhaps that background that helps explain why he’s so comfortable working with regulators today, and directing businesses to work with regulators too.

Who are the first people a prospective captive owner should contact? Regulators, Smith said. If a business wants a “quick lay of the land,” a good first indication of whether its captive idea would fly, reach out to Provost or Bigglestone, advised Smith.

Next steps beyond that would involve commissioning a feasibility study and laying out a business plan, then returning, yes, to the regulators. This is the perfect chance for that face-to-face with the Vermont regulators.

Of course, Smith said that he and his VCIA team are available at any point in the process to brainstorm ideas, and prospects do contact VCIA at various times in the formation process, Smith said — even right off the bat. And again, who will Smith and team direct them to? The regulators.

“What makes those folks unique is their depth in their knowledge of the captive industry,” Smith said, noting how Provost and Bigglestone “came up through the trenches.”

Smith is humble in heaping praise on his fellow captive industry mates, but is also quick to stress VCIA’s role in the “three-legged stool” analogy for the industry — with the legs being formed by regulators, the knowledge base of service providers and VCIA. All three legs aim to keep Vermont on top. Smith ensures that VCIA does its part.

“For me, the biggest success that we have had as an organization is that we have provided the leadership, the education and the networking opportunity to lead the captive industry to thrive in this state,” he said.

“Rich has provided VICA with respectable leadership,” complimented Bigglestone.

 Dan Petterson

Dan Petterson Director of Captive Examinations Vermont Vermont

Dan Petterson
Director of Captive Examinations

Out of the five members of our who’s who, the freshest face is the current director of captive examinations, Dan Petterson. Yet, even this newest leader on the captive team has been in regulation for eight years — the first four on the traditional insurance side and the last four in his current position. Some in the Vermont industry may even know Petterson from his previous stint on the business side with accounting firm PwC.

Since joining the captive regulatory team, Petterson has been implementing a risk-focused examination system, something he had accomplished on the traditional side. He has brought the world-class Vermont team up to the same examination standards that the auditing world is headed toward. He has also continued a Vermont tradition.

“One of the other things that’s important for us is to provide a value-added examination,” he said, explaining that he and his team strive to make the exam as much a learning experience as a requirement. Exams are designed so that companies learn where they might improve. Petterson’s team takes the time to explain their comments and offer proven strategies to overcome any identified weaknesses.


“A good regulator is going to be out to find where a company is lacking. A great regulator will offer help to improve those issues,” Petterson said. “We’re basically looking to ensure the success of the industry, and that goes with every company we look at.”

He has maintained another Vermont tradition: the excellence of the exam department. Professional development for his team is critical, he said. They have 25 examiners on staff now, guaranteeing that if one examiner doesn’t have expertise in a particular topic, another examiner will.

 The Bigger Who’s Who Picture

You have met five of the top, and most visible, stars of the Vermont captive industry and have gotten a sense for their professionalism, their expertise and their camaraderie. But of course the industry is far bigger than these five, and they’ll be the first to tell you. Over 30 years, Provost and two others have served as deputy commissioner, but in that span there have been six governors and countless members of the bi-annual legislature who have supported the business, he said. There have been hundreds, if not thousands, of individuals who power the regulatory departments and each and every service provider, from the accountancies and auditors to the lawyers and the captive managers.

“Every year, year in and year out, everyone supports captives here,” Provost said, “and we have a really deep bench.”

What’s the best way to meet all of these people? In person, of course.

“I often suggest that a prospect should come for a day to Vermont and meet with the state and schedule meetings with three different captive management firms. I believe it is one of the best days of free advice a prospective captive can have,” Towle said.


Complete coverage from R&I’s 2014 Vermont report:

Hospital Group Hits Milestone

Managing Change

Who’s Who in Montpelier

Matthew Brodsky is editor of Wharton Magazine. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.


Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.

R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.


We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?


Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.


Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now an where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.


More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]