The Coalition for Captive Insurance Clarity (CCIC) has praised efforts in the US House of Representatives and Senate to clarify the position of captive insurers are regards the Non-Admitted Reinsurance Reform Act (NRRA).
New legislation to clarify the NRRA has been introduced by Senator Patrick Leahy (D-VT) and Senator Lindsay Graham (R-SC) in the Senate, while a companion bill was introduced by Congressman Peter Welch (D-VT) in the House of Representatives.
"We're delighted that this bi-partisan bill will continue the progress being made to clear up unintended consequences and inaccurate representations regarding the applicability of the NRRA to captive insurers," said Rich Smith, president of the Vermont Captive Insurance Association (VCIA). "I would also like to thank the members of the Coalition for their hard work and support over the past several months."
"The board of the South Carolina Captive Insurance Association (SCCIA) representing the state's captive insurance industry fully supports the NRRA Technical Corrections bill," said Andrea Bartlett, chairman of the SCCIA.
"It is our belief that the clarifying language of this bill will eliminate current misinterpretations of the intent of the NRRA and will allow organizations to select captive domiciles that provide the best options for their risk management programs."
According to the CCIC, the original NRRA legislation created considerable confusion and inadvertently upended one of the organising principles of the captive insurance industry - regulation and taxation by the captive's domicile.
"Congress never intended the NRRA to include captive insurers, and the legislation I have introduced with Senator Graham would simply clarify congressional intent," said Senator Patrick Leahy. "It is a straightforward, common sense clarification that will give needed assurance to the captive insurance industries in Vermont, South Carolina, and across the country."
"This is an important issue for South Carolina," stated Senator Lindsay Graham. "The legislation I have introduced with Senator Leahy will enable organizations to have a choice in where they domicile their captive. Our legislative fix will create opportunities for this emerging industry and I hope Congress will push it into law."
"This important legislation clarifies a provision within NRRA to ensure that captives in Vermont and around the country continue to operate in the same responsible way that they have for decades," said Congressman Peter Welch. "I am pleased to work with Senators Leahy and Graham on this practical fix to an unintended consequence."
A coalition comprised of the captive insurance industry, the Coalition for Captive Insurance Clarity was formed under the leadership of the Vermont Captive Insurance Association to push for clarity that may include legislative language that would reaffirm that the intent of the new federal NRRA was never intended to apply to captive insurance.
NRRA, CCIC, VCIA, captive insurance, regulation