Meet David Guerino from KeyState Captive Management LLC

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When he’s not busy enjoying his family and the outdoors, David Guerino calls on Texas banks as KeyState’s managing director of captive insurance. Since 2015, TBASCO has endorsed KeyState Captive Management. We asked Guerino a few questions to provide an overview of the services KeyState offers.

What is a captive insurance company?

A captive insurance company is a wholly owned subsidiary of the bank’s holding company that operates as a licensed insurance company. Premiums are paid annually to the captive for coverages not covered by the bank’s commercial insurance policies. Lines of coverage can include deductibles, gaps/exclusions, cyber and unique emerging risks not regularly available in the commercial market, such as restoration of reputation and workplace violence.

Why do banks form captives?

Banks form captives to formalize their funding of uninsured/under-insured risks while broadening coverage and elevating the bank’s attention to its risk management strategies while increasing its annual earnings. There are several requirements that a bank must meet to be practical for the program. Both “C” and “S” Corps can qualify, and community banks with assets between $750 million to $15 billion are in the “sweet spot.”

Is a captive a good idea for banks in our COVID-19 world?

Yes, a captive is a great solution. The captives that KeyState manages have paid over $4 million in COVID-19 related claims, as nearly all commercial property policies exclude pandemic coverage.

What service does KeyState offer?

KeyState is an approved captive manager coordinating all operations of the captive. We prepare the monthly financial statements, host annual board meetings, process claims and liaison with the insurance regulator in the domiciliary state.

David Guerino
[email protected]