As of 1 July 2015, Utah’s captive code will include language specifically addressing the use of Limited Liability Companies (LLCs) as a type of captive formation, following its most recent legislative session.
Although LLCs were permitted, specific structure and direction was not present. Previous language only addressed stock company formations.
Utah has also increased the captive exam cycle from a three year to a five year period. Under the new language, the required minimum of $250,000 to be maintained as paid-in capital and free surplus may be accomplished through any combination of either.
Prior language specified a minimum requirement for each element separately, with a paid-in capital requirement of $100,000 and a free surplus requirement of $150,000.
Capitalisation of a cell captive sponsor remains $1,000,000. However, the new language indicates that only a minimum of $350,000 must be provided by the sponsor, and this balance may be provided by the cell companies.
Pooling can now take place within the sponsor of a cell captive, and each sponsored cell captive will be required to pay an annual license renewal fee of $1,000 per cell.
The Utah Department of Insurance’s captive division has stated: “[We] believe these changes will be advantageous in allowing us to better provide services as regulators.”
“We foresee these as being beneficial to our Utah domiciled captive companies. Additionally, we feel that the changes made will continue to contribute to a positive business friendly environment for all.”
