The District of Columbia Department of Insurance, Securities and Banking (DISB) continues its showcase of one of the bureaus or offices and its director. This month’s newsletter features the Risk Finance Bureau.

Dana Sheppard and the Risk Finance Bureau
Associate Commissioner Dana Sheppard of the Risk Finance Bureau was appointed to the head the bureau in October 2005. He is responsible for supervising the licensing and solvency regulation of captive insurance companies and risk retention groups domiciled in the District of Columbia. He also manages the regulation of certified capital companies, which are investment companies that provide funding for small businesses headquartered in the District of Columbia.

He was previously the assistant director of the Risk Finance Bureau’s Compliance Division. Previously, Sheppard was DISB’s Director of Policy and Public Affairs from January 2003 to July 2004. Sheppard joined DISB (then-Department of Insurance and Securities Regulation) in 1997 as a senior attorney, and worked on a variety of insurance and securities issues. Before joining the agency, he was a trial attorney in the District’s Office of the Corporation Counsel, which has since become the Office of the Attorney General.

Sheppard received his J.D. degree from the University of Texas School of Law in 1991; and his LL.M degree, with distinction, in securities and financial regulation from the Georgetown University Law Center in 2004. He taught paralegal studies as an adjunct professor at the University of Maryland from 1999 to 2004, and is a member of the District of Columbia and Maryland bars.

Captive Insurance
DISB embarked on the regulation of captive insurance companies in October 2000 after the Captive Insurance Company Act was enacted earlier in the month. DISB decided to become a captive insurance domicile as part of the city’s broader plan to promote economic development in the District.

Captive insurance companies are owned by their policyholders and are managed by financial and legal insurance professionals. Captive insurance companies have been proven as key drivers of economic development in other jurisdictions by generating significant premium tax and fee revenues through the regulatory process, and serving as the focal point for the development of collateral economic development in areas such as banking, investment management and other financial-service businesses. These companies pay the District premium taxes and licensing fees, which will provide a new long-term source of revenue for its economy. Furthermore, captives do not occupy large office buildings, need raw materials, or require other types of infrastructure or materials that are either too expensive or unavailable in the city.

The District has licensed 64 captive insurance companies to date, and should reach 75 early next year. In 2005, the District of Columbia was the fastest growing captive domicile in the world, and continues to be among the leading captive domiciles in terms of having the most innovative and flexible captive insurance law nationally and internationally. The Risk Finance Bureau employs a team of nine experienced insurance professionals dedicated to the regulation of captives. 

Certified Capital Companies
The Certified Capital Companies initiative began in 2004 after the enactment of the Certified Capital Companies Act of 2004 in the Council of the District of Columbia. There are currently three certified capital companies approved by DISB. These companies have been allocated a total of $50 million to invest in small businesses in the District.

To date, about $13 million worth of loans and investments have been made in 14 local businesses.