Iowa: the newest US captive domicile ready to lead

Iowa’s captive insurance regulatory team explains to Captive International why the Hawkeye State is a place to watch.

The state of Iowa has entered the captive insurance arena with conviction, launching what might be the US’s newest but potentially one of its most forward-thinking domiciles. With a robust insurance legacy, a collaborative regulatory team and a flexible, business-friendly approach, Iowa is positioning itself as a serious competitor in the captive insurance landscape.

Speaking to Captive International, Jeff Wilson, captive insurance director, Cheryl Critelli, captive insurance legal counsel, and Justin Lee, captive examiner – all the Iowa Insurance Division – offered a detailed picture of what makes Iowa’s new captive regime both competitive and unique.

Legacy of insurance excellence

“We’re the newest captive domicile in the US, and we’re proud of the insurance tradition we have in Iowa,” began Wilson. “We have a strong legacy and history going back several decades with 193 domestic insurance companies currently domiciled here.

“We’re promoting a 30-day turnaround for new applications and can handle change requests within a week.”

This strong foundation is not only numerical; it’s embedded in the state’s economy and culture. Critelli pointed out that “11% of Iowa’s GDP comes from the insurance industry. We’re kind of the heart for the financial services industry in the state”.

That depth of experience in traditional insurance makes the Iowa Insurance Division particularly well equipped to understand the nuances of captives. As Wilson noted: “We’re not just trying to dip our toe into that. We’re diving in.”

Modern, business-friendly statute

The Division’s commitment to modernisation and best practice is evident in the construction of its captive legislation. 

According to Wilson, Iowa’s captive statute was “largely patterned after Vermont”, one of the most successful and respected domiciles in the US.

The National Law Review even described Iowa’s legislation as “modern, well written and bearing the strongest resemblance to predecessor statutes from other jurisdictions”.

“We understand the ‘light-touch’ approach when it comes to regulating captives. Some states may not understand that distinction.”

Distinct regulatory philosophy

When it comes to regulatory attitude, Iowa’s approach is clear: balance rigour with responsiveness.

“We understand there’s a difference between regulating a traditional insurance company and a captive insurance company,” said Wilson. “We’re focused on making sure they adhere to our captive statute, ensuring sufficient capital and surplus – and beyond that, being responsive, collaborative and service-driven.”

Critelli added, “We understand the ‘light-touch’ approach when it comes to regulating captives. Some states may not understand that distinction, but we do.”

This philosophy extends to relationship-building. Iowa promises accessibility and responsiveness to its captive clients. “We have a three-person dedicated staff right out of the gate,” said Critelli. “We’ll answer our phones and emails because we’re committed to making this work.”

Lee, reflecting on the team’s readiness, added, “We have the background and expertise to really understand some of the more creative or esoteric captive ideas… the sort of things a typical start-up regulatory team might not be able to fully comprehend.”

Comprehensive structures; swift approvals

Captives looking for structural flexibility will find Iowa a welcoming environment. The state allows pure captives, industrial insured captives, branch captives, risk retention groups, protected cell captives and special purpose captives – which include group, agency and association captives.

This comprehensive offering ensures that the Iowa domicile can cater for a wide array of business models and client needs.

Moreover, the licensing process is designed for speed and clarity. “All our forms, instructions, and applications are available on our website,” said Wilson. “We’re promoting a 30-day turnaround for new applications and can handle change requests within a week.”

Competitive taxation and fees

Iowa also aims to be cost-effective. The application fee is only $200, with an annual renewal fee of $300 – remarkably low in the current market.

As for premium taxes, the first $20 million of direct written premium is taxed at just 0.35%. The minimum annual tax is $5,000, and the maximum is capped at $100,000. “Our taxes and fees are reasonable and competitive – lower than several other domiciles,” noted Wilson.

“We have the background and expertise to really understand some of the more creative or esoteric captive ideas.”

Future focused and strategically positioned

Geographically, Iowa benefits from its central US location. “We’re centrally located and pro-business,” said Wilson. The state aims to leverage this to become a hub for captive insurance in the Midwest and beyond.

The Division is also focused on long-term development. As Critelli and Wilson outlined, the team is working to ensure any law or regulatory changes fit the needs of captives domiciled in Iowa. Future changes are expected to reflect the needs of the market, incorporating lessons from other states while maintaining Iowa’s distinct, service-led identity.

Conclusion: a captive domicile with substance and ambition

Iowa might be the newest entrant in the captive market, but it comes armed with decades of regulatory experience, a deep-rooted insurance industry and a clear understanding of what makes a successful domicile.

Its regulators offer a rare mix of accessibility, technical expertise and commitment to collaborative growth – elements often talked about in the industry but not always delivered. With a modern statute, competitive cost structure and proactive legislative agenda, Iowa is not just entering the captive space – it’s doing so with intent.

As Wilson summarised, “We want to be consistent in our regulation, but also collaborative and creative. We’re here to support the captive industry and build something strong.”

For any business looking to domicile a captive in a jurisdiction that combines experience, flexibility and a genuine desire to innovate, Iowa should be on the radar. With its dedicated team and strategic ambitions, the Hawkeye State is aiming to turn its newest insurance chapter into one of its most successful.

Jeff Wilson is captive insurance director of the Iowa Insurance Division. He can be contacted at: jeff.wilson@iid.iowa.gov

Cheryl Critelli is captive insurance legal counsel, of the Iowa Insurance Division. She can be contacted at: cheryl.critelli@iid.iowa.gov

Justin Lee is captive examiner of the Iowa Insurance Division. He can be contacted at: justin.lee@iid.iowa.gov

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