The North Carolina captive insurance program, established in 2013, had an estimated $30 million impact on the state in 2017, according to a statement from the North Carolina Insurance Department.
The $30 million estimate comes from a recently completed study by the NCDOI on the economic impact of the state’s captive insurance company program. The impact was generated by premium taxes paid to the state by licensed captive insurers as well as service providers – such as CPAs, actuaries, attorneys, captive managers and investment managers – and hospitality revenues generated by North Carolina businesses for services they provide to the captive insurance industry.
Captive insurance is a form of self-insurance through which a business may form its own insurance company to manage its risks. North Carolina Captive Insurance Act, enacted in October 2013, requires captive insurance companies domiciled in the state to either hold one board of directors meeting in the state or use at least two North Carolina service providers, such as CPAs, attorneys, or actuaries, thus generating an economic impact in the state.
NCDOI said its captive insurance program has grown year over year since its inception in 2013. It reported in April the department had licensed a total of 248 captive insurers and approved 437 cells and series.
As of April 5, 2018, 635 risk-bearing captive insurance entities were under the regulation of NCDOI, including 232 active captive insurers and 403 active cells or series.
The 232 active captive insurers are comprised of the following:
- Pure captive insurers: 180
- Protected cell captive insurers: 26
- Risk Retention Groups: 6
- Special purpose captive insurers: 20
The amount that the program has impacted the state’s economy has also increased annually.
The 2017 impact of $30 million is up $7 million from the 2016 economic impact estimate of $23 million. In 2015 the economic impact was $15.3 million, and the 2014 economic impact was estimated at $2.5 million – a total increase of nearly $71 million in the four years since the N.C. General Assembly established the captive insurance program.
“North Carolina’s captive insurance law, while providing for appropriate regulation, allows companies to form and operate their own insurance companies without getting tangled up in unnecessary red tape,” North Carolina Insurance Commissioner Mike Causey said.
Source: North Carolina Department of Insurance
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