Delaware’s insurance commissioner, Karen Weldin Stewart, said this week the state’s captive insurance industry is growing at a fast pace. She also said the insurance department has recently given $250,000 from the captive insurance program’s surplus money to the state.
The commissioner said that since forming the captive bureau in 2009, the insurance department has experienced a 800-percent growth rate in the number of licensed captive insurance entities.
“In 2009 when I started the captive bureau, we had 38 captive insurers. At the end of 2011 there were 338 captive risk bearing entities that generated nearly $1 billion of insurance premium. I attribute this growth to innovative designs in alternative risk transfer that maximize the power of the Delaware’s corporate and business entity laws,” Commissioner Stewart said.
Commissioner Stewart said Delaware is now in the top five of U.S. captive domiciles and one of the top 15 in the world. Captive insurance is a new, growing source of revenue for the state, she said. “Through the efforts of my capable captive staff, we have developed a new source of revenue for today and the future.”
In 2011, the captive bureau generated more than $1.2 million in tax revenue, which is a 100-plus percent increase from the $600,000 generated in the captive bureau’s first year of existence. Additionally, there are more than 300 captive risk bearing entities regulated by the captive bureau that are also Delaware domiciled business entities, which generates revenue for the Secretary of State.
The revenue amount that has been collected for 2012 has exceeded the operating costs for the captive bureau and the excess amount was then transferred to the Secretary of State and directed to the City of Wilmington.
The Delaware Code Title 18 Chapter 69 provides for the ability of the insurance commissioner to transfer monies to the General Fund in excess of the funds that would be reasonable to fund the captive insurance program for the upcoming year. If such funds are transferred pursuant to the Delaware code, those funds will be remitted to the City of Wilmington by the Secretary of State.