New Jersey Department of Banking and Insurance Commissioner Ken Kobylowski announced the approval of a new line of authority for HCSG Insurance Corp., a captive insurer formed last year by Healthcare Services Group Inc. (HCSG) of Bensalem, Pennsylvania.
Under the new authority, Healthcare Services Group joins a new but growing area of captive insurance for company employee benefit plans, according to the announcement.
“Healthcare Service Group’s expansion of its captive insurance company is a testament to the company’s innovation and another indicator of the strength of New Jersey’s captive market,” said Kobylowski.
Healthcare Services Group’s expansion of its captive insurer shows how captives can adapt quickly to help companies cover additional risks and grow their business, he added.
In January 2014, Healthcare Services Group received approval to form captive insurer HCSG Insurance Corp. to write general liability deductible reimbursement coverage for the company.
Under the new authority, lines of business covered by the captive will include limited medical, short term disability and term life. HCSG Insurance Corp. also recently received approval for this new line of authority from the U.S. Department Of Labor (DOL).
A spokesperson for the New Jersey Department of Banking and Insurance said that since limited medical, short term disability and term life policies are considered employee benefits, the plans are also regulated by ERISA (Employee Retirement and Income Security Act) and requires DOL’s approval.
Healthcare Services Group provides professional management of healthcare industry services such as housekeeping, laundry, dining and nutrition. The company employs 45,000 in 48 states, and services more than 3,700 housekeeping/laundry facilities and more than 900 dining/nutrition facilities. In New Jersey, HCSG provides services to 116 facilities and employs 1,570 individuals.
Legislation allowing the formation of captives in New Jersey was enacted in 2011. Since the law became effective, the New Jersey Department of Banking and Insurance has approved the formation or redomestication of 17 captives, and there are currently several other potential captives in various stages of approval in New Jersey.
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