QualCare Captive Insurance Company, a captive of QualCare Inc, has been approved as the first sponsored cell captive in the state of New Jersey.
The formation will allow for both member companies of the parent and third party entities to participate in the risk:reward opportunities associated with medical stop loss coverages related to their self-insured medical benefit plans.
QCIC will rely on QualCare Management Resources, a newly formed sister company, to provide captive insurance management and financial services for its clients and partners.
Ken Kobyloweki, department of banking and insurance commissioner, added: “The Department is pleased to welcome QualCare Captive Insurance Co. to New Jersey’s expanding captive insurance market. We have now licensed nine captive insurance companies in New Jersey since the captive insurance law was enacted in 2011. This market is a success story and it exemplifies the strong economic development agenda that the Christie Administration has established here.”
Gregg Sgambati of the New Jersey Captive Insurance Association told Captive International how the new legislation would impact the domicile: “the sponsored cell captive insurance company brings a lower cost of entry for mid-market companies. This benefits the industry where as these companies otherwise might not have considered the ownership of a captive insurance company feasible. Since a key growth area for newer domiciles is the midsize company, this is a benefit. The regulatory process is more streamlined but the minimum aggregate tax paid by the cell remains the same as for a non-cell captive. So sponsored cells are fiscally attractive."
Sgambati acknowledged that other cell captives will look to set up in New Jersey, but that the legislation was not the determining factor. He said: “consultants and brokers need to find that sponsored cells are a good solution for their clients and then bring the concept of captive insurance to small and mid-size companies. I believe this will happen. We will see more cell captives.”
New Jersey, cell captives, captive insurance, regulation