Amendments proposed to the North Carolina Captive Insurance Act by the North Carolina Department of Insurance were met with unanimous support from the N.C. General Assembly and signed into law on June 19, 2015.
Some of the amendments include:
- Clarifying language and technical changes, especially to provisions governing protected cell captive insurance companies.
- Discretion to the insurance commissioner to establish capital and surplus requirements of less than $250,000 for special purpose captives if the captive’s business plan and feasibility study demonstrate the lower capital level is reasonable and adequate for the needs of the captive. This provision is similar to the statutory provision already in place for pure captives.
- Ability for a captive insurance company to establish one or more separate accounts.
- Authority to the insurance commissioner to waive the filing of the annual report by a captive insurance company on a case-by-case basis, if the captive insurance company complies with the annual audit requirements.
- Authority to the insurance commissioner to exempt an inactive captive insurance company from the annual filing and reporting requirements and the premium tax filing and payment requirements.
NCDOI staff will discuss the legislative improvements on August 25 at the second annual conference of the North Carolina Captive Insurance Association.
Captive insurance is typically a form of self-insurance in which an insurance company is formed to insure the risks of the parent company and its affiliates. According to the North Carolina Department of Insurance, North Carolina has experienced success with its young captive program, which originated in 2013. Since that time, North Carolina has licensed 53 captive insurance companies, 11 of which are protected cell captives that house more than 120 cells. It is estimated that these 53 captives will positively impact North Carolina’s economy by more than $2.5 million annually.
Source: North Carolina Department of Insurance
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