Legislation proposing amendments to the North Carolina captive act, including the addition of a premium tax holiday for captives redomesticating to the domicile, has been delayed by the state’s House Insurance Committee.
The Committee amended HB220 by adopting a committee substitute that removed the premium tax holiday proposal and the other technical amendments to the captive act.
The bill, which was the result of collaboration between the North Carolina Captive Insurance Association (NCCIA) and the North Carolina Department of Insurance (NCDOI) Captive Division, proposes technical amendments engineered to make the state more competitive in the captive market.
Additionally, it includes the introduction of a premium tax holiday, which would allow any captives operating in the domicile that are licensed by other states to pay no premium tax for the contract years 2019 and 2020 if they take action to relicense with North Carolina.
The house leadership indicated to the NCDOI shortly before the meeting that they would prefer to act on the legislation at a later date–potentially during the short session of the legislature in 2020.
The NCCIA suggests this action makes it unlikely the bill will be considered further in the House this year.
In the Senate, SB 211, the companion bill containing the same changes, will likely follow the House, and assuming HB 220 makes the 9 May crossover deadline, the Senate Insurance Committee will take up HB 220 in lieu of SB 211 later in May.
In a statement, the NCCIA said it was “disappointed at the legislation being delayed”.
The association added: “Securing introduction and eventually passage of the Captive act technical amendments is a joint collaborative and consensus effort by the Association with NCDOI.”
“This legislative turn of events will be addressed by the NCCIA board of directors when it meets on 8 May.”
“Meanwhile, North Carolina will continue to encourage re-domestications for those captives doing business in the Tar Heel State but which are not licensed or regulated by NCDOI.”
