New Jersey regulators held their first captive insurance summit this Wednesday in Somerset, N.J. The event, hosted by the state’s department of banking and insurance, attracted some 80 industry executives.
Regulators took the opportunity to discuss New Jersey’s captive law and regulations, the admission process, and emerging captive trends and issues.
The department of banking and insurance stated that since New Jersey Governor Chris Christie signed the captive law into effect in 2011, the department officials have taken an active approach to fostering growth in the captive insurance marketplace.
The Wednesday’s event included two panel discussions. The first panel focused on the specifics of the New Jersey law, the admissions process and what potential applicants can expect when starting a captive insurer. Some of the topics discussed included reviewing the captive structures that fit the needs of an interested party; re-domestications; interactions with the regulators; the application and formation process; choosing service providers; timing and other expectations; and final approval/certification by the department.
The second panel discussed national issues faced by captive insurers and their owners. Some of the issues discussed at the panel included: employee benefits; international events; reputational risk; the Nonadmitted and Reinsurance Reform Act (NRRA) and state self-procurement tax; the hardening insurance market; cyber risk coverage; and Terrorism Risk Insurance Act (TRIA) risk.
Since the state’s captive law was signed into law, four captives have been approved by regulators. Kenneth Kobylowski, acting commissioner of the state department of banking and insurance, said at the event that eight prospective captive insurers are now in the pipeline. “There is no question that this is just the beginning,” he said.
Kobylowski also told attendees that a growing number of companies are thinking about forming captives to gain greater control of their ability to identify, manage, and finance insurable risks.