Northern Marianas positions itself as captive insurance hub
The Commonwealth of the Northern Mariana Islands (CNMI) has enacted Public Law 24-03, known as the CNMI Captive Insurance Act of 2025, establishing a comprehensive legal framework for licensing, regulating, and supporting the operation of captive insurance companies within the territory. A captive insurance company is defined as a wholly owned subsidiary formed to insure the risks of its parent company and affiliated entities.
The law aims to attract and grow a robust captive insurance industry in CNMI, enabling entities to manage risks independently from traditional insurers. It authorises the formation of various captive types, including pure, group, industrial insured, protected cell companies, and risk retention groups. The legislation sets minimum capital and surplus requirements, ranging from $50,000 for pure captives to $750,000 for protected cell companies, depending on structure and business scope.
Key regulatory provisions include licensing procedures, governance standards, confidentiality protections, investment freedoms, and periodic financial reporting requirements. The Act also mandates actuarial audits, risk-based capital reports, and defines detailed responsibilities for protected cell companies, particularly around asset segregation and creditor protection.
The Commissioner of Insurance is granted broad authority to approve, supervise, and, if necessary, revoke licences, enforce capital adequacy, examine companies, and promulgate rules. A CNMI Captive Insurance Advisory Committee is also established to advise the Commissioner on licence applications and other regulatory matters.
Captive insurers are exempt from joining compulsory insurance guaranty funds and from certain investment restrictions. They are subject to a 2% premium tax and must maintain their principal place of business within CNMI.
The Act includes severability and savings clauses to protect existing rights and proceedings, and it took effect upon the Governor’s signature on 12 June 2025.
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