26 August 2020Law & regulation

Oklahoma reduces capitalisation requirement for some special purpose captives

The Oklahoma Insurance Department (OID) has reduced the capitalisation requirement for certain special purpose captive insurers to $50,000, effective from September 16, 2020.

The reduction in the minimum capital and surplus level applies to special-purpose captive insurers organised as a series, a form of business organisation that can include pure captives, agency captives and other forms of captive insurance companies.

Eligible captives must not accept or receive direct or assumed risk or issue any form of insurance contract. They must insure the risks of their participants only through separate participant contracts and fund their liability to each participant through one or more protected cells. The assets and liabilities of each protected cell must be segregated from the assets and liabilities of other protected cells, and from the assets of the SPV insurance company’s general account

The OID communicated the change to participants in the state’s captive insurance industry via a note. Captives wishing to take advantage of this reduction must apply via the OID captive division.