The US State of Nevada has updated its approval process, with the promise that each and every application landing on its desk will be stamped within 24 hours.
“Our function in the past has been only to do approvals one day a month, so depending on when your application came into the division, it could sit around for nearly 30 days,” said Mike Lynch, deputy commissioner of the captive section at the Nevada Division of Insurance.
“But the actual review of the captive application is done in a day. So now the commissioner has said he will do [them] based on the recommendation of approval as they come in, as opposed to just waiting for that arbitrary third Thursday of every month.”
Fees are not being changed, but there is potential for owners of pure captives to save a decent amount, according to Lynch
“There was a $4000 independent review fee we did that was tied to the review of pure captive applications, but we also do it for RRGs (risk retention groups) and other types of captive formations. For the pure captives, the independent review went something along the lines of, ‘that looks about right’; they are not very complicated transactions. Some of them are even a single transaction.”
“So for those simple ones, we can save them $4000 of their upfront application fee, because they are not going to need a formal actuarial review.”
Lynch also stated that he wished to educate on the state’s ability to service series limited liability company (LLC) entities and segregated cell captive programmes.
“When people talk about LLC entities and segregated cell programmes, their first though of domicile is Delaware or Washington DC.
Nevada has been able to do that since 2005, but we’ve only had our first one come in as of 2012. We want to get the word out that we are able to deal with these programmes too.”
The state sought to increase sign-ups after a few years of turbulent captive administration with the implementation of a new law.
Assembly Bill 74 contained provisions that reduced compliance expenses, lowered application costs and simplified financial reporting.
The state became a domicile in 1999, and is currently home to 127 captives.
