Offshore redomiciliations contribute to North Carolina's captive growth
The State of North Carolina licensed 66 captive licenses in 2017, with a further three during 2018 so far.
As of April 5, 2018, 635 risk-bearing captive insurance entities are under the regulation of the North Carolina Department of Insurance (NCDOI), including 232 active captive insurers and 403 active cells or series.
Breaking down the 232 active captive insurers there are 180 pure captive insurers, 26 protected cell companies, six risk retention groups (RRGs), and 20 special purpose captive insurers.
The growth of North Carolina's captive insurance programme, now in its fifth year of operations, has been attributed to the formation of new captive insurers and the transfer of other captive insurers to this state from other US and offshore domiciles.
NCDOI suggested that while the growth of small captives continues to be strong, there has also an increase in the licensing of larger captives and RRGs.
"These insurers are primarily writing property and casualty lines of business; however, the NCDOI continues to see an upward trend in the formation of medical stop loss captive insurers. Other lines of business written by recently formed North Carolina captive insurers include tenant liability, surety, commercial auto, and warranty liability insurance," NCDOI said in a statement.
North Carolina Insurance Commissioner Mike Causey added: “I applaud and welcome the solid growth of the state’s captive insurance company program. In just five years, as captive insurance companies have made North Carolina their home, the program’s growth has positively impacted the state’s economy by creating jobs and generating premium taxes and business revenues.”
The North Carolina Captive Insurance Act was enacted in October 2013, enabling the formation and operation of captive insurers in North Carolina. Since the program’s inception, the NCDOI has licensed 248 captive insurers and approved 437 cells and series.
A study to determine the favourable financial impact of the captive industry on North Carolina's economy is anticipated to be released in May 2018.