South Dakota captive bill will increase domicile’s ‘flexibility’
The South Dakota Senate has passed a bill hoped to strengthen the state’s captive insurance industry.
The passage of HB1061 allows for the formation of new types of captive insurance companies in the state, including sponsored captives, special purpose captives and trust captives.
Currently, South Dakota state law only allows pure and group captives, which write commercial general liability and high deductable property insurance.
“HB1061 creates some exciting opportunities for our captive market,” said Merle Scheiber, insurance director for the South Dakota Department of Labor and Regulation. “South Dakota is prepared and ready to be a national leader in this arena.”
Wendell Malsam, assistant insurance director at the South Dakota Department of Labor and Regulation, told Captive International: “by allowing these additional types of captive insurance companies to form here in South Dakota, we will be more in line with what some of the major captive jurisdictions are allowing, and it provides for flexibility in how we regulate captive insurance companies.
“Additionally, specifically setting forth in our laws that a trust can own a captive insurance company sets us apart from other captive jurisdictions.”