The New Jersey Department of Banking and Insurance has approved the US state’s fourth captive insurance company under its captive law.
The department of banking and insurance issued a certificate of authority for Exchange Indemnity Company New Jersey (EICNJ), a wholly owned subsidiary of Verizon Communications, on 7 May.
Verizon Communications provides broadband and other wireless communications services to mass market, business, government and wholesale customers.
The firm, which has its headquarters in Morristown, will provide liability insurance deductible coverage for various Verizon subsidiaries.
Verizon employs thousands of New Jersey-based employees and provides landline, broadband, video services, mobile phone and other wireless services to New Jersey residents.
The company will use EICNJ to help stabilise and control its insurance costs, improve coverage availability and improve its cash flow, according to the department of banking and insurance.
Before the governor of New Jersey, Chris Christie, signed the state’s captive law in February 2011, it did not allow captive insurance firms to be established.
This prompted major New Jersey employers to establish captive insurers in other states and countries. Without New Jersey’s own captive law, companies would continue to go to other jurisdictions to form their captives, according to the department of banking and insurance.
“I am very pleased that Verizon has acted to take advantage of the Christie administration’s efforts to promote development in all sectors of the economy,” said the New Jersey Department of Banking and Insurance’s acting commissioner, Ken Kobylowski.
He added: “This is another example of a business friendly New Jersey. Businesses can now insure their New Jersey risk in New Jersey. Our captive law is creating new opportunities for business creation that will in turn help already established firms grow.”
EICNJ is the first captive insurer to be approved in 2012. In 2011, the department approved three captives, including Ports Insurance Company and Prudential New Jersey Captive Insurance Company.
