Moody’s Corp., which is best known for its investors service, has won approval from the New York State Insurance Department to establish a captive insurer in the state, Moody’s Assurance Company Inc.
The captive is the third to be set up since a change in the law in 1997 permitted captives to operate under NY law. Further legislation has been proposed to make them easier for NY companies to form.
NYSID Superintendent Gregory V. Serio noted that, “By allowing corporations such as Moody’s to set up their insurance programs here, we are addressing the critical needs of business in New York, namely, cutting costs for these corporations–who in the past had to maintain separate staff and offices in another jurisdictions [sic]. This is a win for New York State as well as our business community.”
The NYSID bulletin went on to indicate that, “All the information necessary to become licensed as a captive is available by calling the Department or by visiting its website at www.ins.state.ny.us. The Department will shortly unveil a new Web site dedicated to captive development in New York. Companies can quickly download the licensing forms as well as a copy of the law from the site. The approval process for licensing of a captive insurer is estimated to be only 30 days.
While all of this may be good news for the NYSID and the companies who fell they can benefit by forming captives, it can hardly be good news for NY agents and brokers, who will inevitably lose some of their larger clients to the increasing trend towards seeking coverage in the parallel market.
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