New bipartisan legislation to clarify the Non-Admitted Reinsurance Reform Act (NRRA) in relation to captive insurance has been introduced in the US Senate.
Efforts to clarify the law have been a priority of the Coalition for Captive Insurance Clarity (CCIC), with the new legislation being met with praise by coalition members.
Andrea Bartlett, chairman of the South Carolina Captive Insurance Association, said: “It is our belief that the clarifying language of this bill will eliminate current misinterpretations of the intent of the NRRA and will allow organisations to select captive domiciles that provide the best options for their risk management programmes.”
It has been claimed that the original NRRA legislation created considerable confusion and inadvertently upended one of the organising principles of the captive insurance industry—regulation and taxation by the captive’s domicile.
Senator Patrick Leahy commented: “Congress never intended the NRRA to include captive insurers and the legislation I have introduced with Senator Graham would simply clarify congressional intent.”
“It is a straightforward, commonsense clarification that will give needed assurance to the captive insurance industries in Vermont, South Carolina and across the country.”
According to a press release, the CCIC was formed under the leadership of the Vermont Captive Insurance Association to “push for clarity that may include legislative language that would reaffirm that the intent of the new federal NRRA was never intended to apply to captive insurance”.
