At a ceremonial bill signing held earlier in the week, the Delaware Captive Insurance Association (DCIA) commended the Delaware General Assembly and Delaware Gov. Ruth Ann Minner for the recent passage of House Bill 218, which amends the state’s legislation relating to captive insurance companies.
Enacted on July 12, the Delaware Revised Captive Insurance Company Act was a collaborative, bi-partisan effort of the Offices of the Governor, the Secretary of State, and the Insurance Commissioner of the State of Delaware, along with Delaware lawmakers and private sector groups. It was sponsored by Representative Donna Stone (R – Dover South) and State Senator Patricia Blevins (D – Elsmere), who chair the Senate and House Insurance Committee, and was supported by Insurance Commissioner Matt Denn.
The Delaware Revised Captive Insurance Company Act substantially rewrites the state’s original captive insurance company statute, which has been in effect since 1984. Its objective is to encourage the formation of new captive insurance companies – known as captives – in Delaware, thereby bringing the state new business, tax revenue, and jobs.
“Delaware’s new captive insurance legislation further positions the state as a preeminent business jurisdiction and offers captive insurance companies some distinct advantages,” said Richard Klumpp, interim executive director of the DCIA. “In addition, it should be an engine for future economic development in the state. Captive insurance is a growing business worldwide, and this new statute makes Delaware extremely competitive with other leading international and domestic captive insurance jurisdictions. Everyone involved in this important modernization deserves credit for a job well done.”
Given the dramatic increases in commercial insurance premiums over the last several years, many organizations are reportedly seeking better, more cost-effective ways to carry their necessary insurance coverage. According to Delaware’s new statute, captive insurance companies give businesses “greater financial control by helping them to secure more stable insurance pricing, reduce expenses, improve cash flow, access tax savings, and increase negotiating leverage with commercial insurers.”
Highlights of Delaware’s new legislation include:
* flat, capped premium taxes
* measured, responsible regulation
* cost advantages
* allowable licensing of a variety of captive types
* expanded choices in the legal form of organization a captive may take
* a wide range of allowable insurance coverages
* flexibility on minimum capital and surplus requirements
* investment opportunities.
Was this article valuable?
Here are more articles you may enjoy.