The New Jersey Department of Banking and Insurance announced Wednesday that the department approved Lumerica Insurance Company, a subsidiary of BASF Americas Corporation, to operate as a captive insurer in New Jersey.
The Florham Park company’s principal business is to insure BASF’s North American property and excess liability exposures. The company was originally domesticated in Vermont in 2005 and this year redomesticated to the Garden State.
“The Christie Administration continues to grow a competitive captive insurance marketplace,” said Department of Banking and Insurance Commissioner Ken Kobylowski. “I am very pleased that a company of BASF’s caliber has chosen to redomesticate an important part of its insurance services operation to our state.”
Robert Smith, vice president of tax, insurance and real estate for BASF in North America, said his company appreciates the help and cooperation of New Jersey regulators in moving Lumerica to New Jersey.
Smith said BASF recently opened a new North American headquarters in Florham Park, N.J., so having Lumerica operate in New Jersey further demonstrates the company’s commitment to the Garden State.
In February 2011, N.J. Gov. Chris Christie signed the Captive Insurers Act, P.L. 2011, c.25, which allows for the formation of captive insurance companies in New Jersey. Captive insurance companies are insurance firms established with the specific objective of financing risks emanating from their parent group or groups.
Since the law took effect, the state’s Department of Banking and Insurance has approved the formation of eight captive insurance companies and there are currently many more potential captive insurance company formations in various stages of approval in New Jersey.
Last fall, the Department of Banking and Insurance hosted a captive insurance conference that helped companies planning to form captives become more familiar with the state’s regulations and application process.
The meeting brought captives industry experts together to discuss emerging trends and issues. Regulators said that effort is paying off as more captives are poised to form or redomesticate in New Jersey this year.
“Our growing captives industry is already represented by firms providing services to the shipping, communications and healthcare industries,” Commissioner Kobylowski said.