Legislation which would omit captives from the Nonadmitted and Reinsurance Reform Act (NRRA) has been reintroduced to the US Senate.
The Captive Clarification Act, which was reintroduced by Senator Patrick Leahy and Senator Lindsey Graham, would provider risks professionals with greater clarity on expenses associated with their organisation’s captive investment.
Currently, captives are not explicitly excluded from the definition of “nonadmitted insurer” under the act, which leaves insureds unclear on whether independent procurement taxes on the insurance purchased from their captive must be paid to their home state in addition to the captive domicile.
Risk management society RIMS has supported the reintroduction of the bill.
Rick Roberts, president of RIMS, said: “For risk professionals to successfully manage alternative risk programs like captives, we need a clear understanding of government regulations. The NRRA, in its original form, leaves risk professionals guessing as to whether their organisations will be taxed twice and even whether they need to change the location of their captive.
“The Captive Clarification Act clears up that uncertainty. We fully support Senator Leahy and Senator Graham’s reintroduction of the legislation and hope that a committee hearing and companion bill from the House will follow soon.”
Nonadmitted and Reinsurance Reform Act, NRRA, US Senate, Captive Clarification Act, North America, RIMS