25 June 2015Law & regulation

North Carolina passes ‘responsive’ captive laws

North Carolina has recently signed into law a number of changes to the NC Captive Insurance Act.

Previously, when speaking to Captive International, a number of staff in North Carolina’s captive insurance division outlined plans to make the law responsive to what is currently going on in the market.

The amendments were met with unanimous support from the NC General Assembly and signed into law on June 19, 2015.

“The most significant change involves making our law, which we have always taken as a living document, receptive to the current market conditions,” said Ray Martinez, senior deputy commissioner in the company services group at the NCDOI.

The amendments clarify language and technical changes, especially to provisions governing protected cell captive insurance companies.

In addition, the Insurance Commissioner now has the discretion to establish capital and surplus requirements of less than $250,000 for special purpose captives if the captive's business plan and feasibility study demonstrate the lower capital level is reasonable and adequate for the needs of the captive. The provision is similar to the statutory provision already in place for pure captives.

The Commissioner also has the authority to waive the filing of the annual report by a captive and exempt an inactive captive from reporting requirements.

The North Carolina Department of Insurance surpassed its estimate of licensing 40 captives by the end of 2014. In 2014, 49 captives were approved, bringing the total to 53 captives. The department became authorised to license captive insurance companies in late 2013.