New Jersey-based SOBC Corporation is to establish a sponsored captive insurance subsidiary in Connecticut that will specialise in helping reinsurers that are exiting the market pay off their claims.
The subsidiary, SOBC Insurance Company, is the state’s eighth captive insurer and first sponsored captive company since legislation cleared the way for such entities in 2011.
The Insurance Department recently licensed the SOBC sponsored captive after an extensive application process.
“A business plan for a successful applicant is one that must be prudently-managed, well-capitalised and rooted in sustainability,” said Connecticut insurance commissioner Katharine Wade.
“These are not short-term entities but must be committed to meeting the long-term obligations of their clients and ultimately provide another tool for businesses and employers to control their costs.”
A sponsored captive’s client is not the parent company but can be one or more entities that use segregated accounts, or cells, set up by the sponsor to finance each client’s risk.
The SOBC captive will provide risk financing, management, and claims services for portfolio transfers of small books of business currently exiting the market.
Brian Johnston, president of SOBC Insurance Company, said: “John Thomson and his team at the insurance department have been extremely responsive to our unique business plan.”
“Our new Connecticut platform gives us the ability to segregate the portfolios of acquired assets, which is a significant advantage for our business and our clients.”
