Utah licensed 42 risk bearing entities in 2019, 11 of which were cell captives, according to statistics from Travis Wegkamp, director of captive insurance for the Utah Department of Insurance.
The state finished 2019 with a total of 435 risk bearing entities, a decrease on the 441 from 2018.
Although there was a decrease from 2018, Wegkamp was positive on the trend that he is currently seeing, he said: “While this is a net decrease of six for the year compared to the previous year-end total, the captives that are replacing the closures are larger companies with more robust risk management programmes, higher premium volume, and a long-term outlook for the use of their captive”.
Wegkamp also revealed that Utah will be introducing a change for the current 2020 legislative session, which the director of captive insurance suggested: “will have a strong impact on Utah's attractiveness as a captive domicile”.
The change will be a single additional line of language that will allow their captives to reinsure pure third-party risk with prior approval of the commissioner.
Wegkamp explained: “This has the two-pronged effect of also allowing our pooling captives to share and reinsure risk without the need to meet the controlled unaffiliated business (CUB) test. For a captive to insure directly though, the insured would still need to meet the parent, affiliate or CUB requirement”.
Look out for the full interview in the next issue of Captive Insurance Times.
