What makes Delaware unique as a captive domicile

2020 was a year like no other for most businesses, including captive insurers. Companies who owned a captive were happy they did, as the captive supplied protection that the commercial carrier could not provide. Additionally, as the global property market continues to harden, more companies are turning to captives as a viable alternative to the commercial insurance market.

In fact, 2020 was a banner year for new captive formations. The Delaware Department of Insurance (DOI) recently reported that it licensed 70 new captives in 2020, which is the highest number of new licenses issued since 2017.

In my role as president of the Delaware Captive Insurance Association (DCIA) people often ask me what makes Delaware unique as a captive domicile. My response is that Delaware is a small state with a close-knit community where the local legislators and regulators are accessible. From a captive insurance perspective, this translates into the local captives industry in which DCIA board and committee members have the ability to work closely with Delaware’s representatives and the DOI regulators to communicate more efficiently and effectively.

When the DOI is developing legislation each year, insurance commissioner Trinidad Navarro and his team reach out to the DCIA’s legislative committee and request input. This process involves conversations between DCIA committee members and the DOI, and DCIA may request modifications to drafted language or provide other suggestions and requests before the department’s legislative agenda is finalised and introduced to members of Delaware’s General Assembly.

Regulatory matters

The DCIA regulatory liaison committee works very closely with DOI’s captive insurance bureau to evaluate regulatory items that need to be updated to address patterns that arise during the annual examination process. This process usually involves very frank discussions between DCIA stakeholders and the captive insurance bureau, but the discussions are always handled in a professional manner and may result in minor tweaks to Delaware’s captive insurance regulations, which ultimately benefit the captives industry as a whole.

Last, but certainly not least, the DCIA marketing committee works very closely with Delaware’s captive insurance bureau to ensure marketing efforts are in sync with the bureau’s strategic plan. In 2020, the DCIA board of directors made the difficult decision to postpone the annual conference—twice. That meant it would be a full two years before DCIA members are able to gather together in person again.

Fortunately, we were able to hold a virtual event in September 2020, which featured Delaware’s captive insurance director, Steve Kinion, who is extremely knowledgeable and well respected in the global captives industry.

What makes Delaware unique as a captives domicile is the ongoing collaboration between the DCIA and the DOI, which happens almost seamlessly throughout the year. This is because our state is small, our regulators are accessible, and our association comprises local captives industry members who are invested in Delaware’s success as a captive insurance domicile.

Save the Date! DCIA Fall Forum November 3–4, 2021, at the Hyatt Place Wilmington Riverfront, Wilmington.

Joanne Shaver is president of the Delaware Captive Insurance Association. She can be contacted at: jshaver@intuitivecompanies.com