A year of growth and promise
Lori Gorman (pictured) of the North Carolina Department of Insurance provides Captive International with an update on the domicile’s operations.
How has the past year been in terms of captive development in North Carolina?
North Carolina has continued to see strong interest in captive formations during the first half of 2024. North Carolina’s flexible captive law provides the Commissioner with a great deal of flexibility and discretion when regulating captive insurers.
This prudent regulation together with the low-cost formation and operation aspects of our programme combine to make North Carolina a welcoming home for companies of all sizes seeking to form a captive insurer.
Has any legislation been passed that affects captives?
With the North Carolina General Assembly passing SB 319, Captive Act Amendments in June 2024 and signing it into law in July, North Carolina becomes an even more attractive domicile for captive insurers. SB 319 includes a provision extending the termination date for the redomestication provision, allowing captive insurers a full two years to relocate to North Carolina and receive a two-year premium tax holiday.
It also lowers the retaliatory tax rate to 1.85 percent from 5 percent, enhancing North Carolina’s appeal for risk retention groups (RRGs).
How much competition does North Carolina face as a domicile?
North Carolina’s captive insurance law was passed in 2013, just a little more than a decade ago, so our state is a fairly recent entry into the industry as a captive domicile.
In enacting this legislation, North Carolina was seeking to meet the needs of state-based businesses who previously had to go outside the state to form captive insurance companies. Now, 10 years later, we attribute the success of our programme to our modern captive insurance laws, a business-friendly approach taken to regulation and our team of regulatory professionals’ commitment to customer service. We benefit from the contributions of the North Carolina Captive Insurance Association (NCCIA) and the support of captive industry service providers and owners alike.
The captive industry is favourably impacting North Carolina’s vibrant economy by generating premium tax revenues and business revenues in addition to creating jobs in the industry. As captive insurance becomes more widely accepted as an alternative to traditional insurance, more states may be considering captive insurance legislation to take advantage of the positive economic impact the industry could have on their own states’ economy.
“The captive industry is favourably impacting North Carolina’s vibrant economy by generating premium tax revenues and business revenues.” Lori Gorman
Have any particular types of captives been registering in North Carolina?
We have noted formations from various industries including finance, healthcare and construction. While licensing a number of pure captive insurance companies, we continue to see an influx of cell structures with their ease of formation and lower capitalisation requirements.
What do you think lies ahead for North Carolina?
I see continued growth of the captive insurance industry in our state. With the support of state leaders and Commissioner Mike Causey working collaboratively with the NCCIA and seasoned industry professionals, North Carolina is well-positioned to meet emerging trends and the evolving needs of the industry.
Lori Gorman is the deputy commissioner of the North Carolina Department of Insurance’s Captive Insurance Companies Division. She can be contacted at: lori.gorman@ncdoi.gov
Click here to read Captive International's US Focus 2024 publication.
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