The North Carolina governor Pat McCrory has signed captive bill H. 287 into law.
These amendments became effective and a part of the North Carolina Captive Insurance Act on 30 June and apply to currently licensed captive insurance companies and pending applications.
Altogether there were 44 changes, five of those significant for captives.
The amendments include a captive insurance company exemption from in-state board meetings, if the captive insurance company utilises at least two North Carolina-based service providers.
These services can include legal, accounting, actuarial, investment advisor, captive manager and others acceptable to the commissioner.
Another important proposed legislative change is to provide the commissioner with additional discretion to establish the minimum required capital and surplus for a protected cell captive insurance company.
The current law requires a minimum of $250,000; however, the proposal would allow the commissioner to set the minimum requirement below $250,000, if that amount is sufficient to support the captive insurer’s risk profile.
Other changes include provisional approval for a captive license for a period of up to 90 days, with amendments allowing for extensions under certain conditions. Under this amendment the commissioner also has the ability to limit and rescind the authority of any provisional license at any time.
Also, there have been minor technical amendments to rules regarding the formations of captive insurance companies; conflict of interest; plan of operation change; insurance manager and intermediaries; extension for filing the annual reports; license suspension or revocation; and clarification of the annual filing requirements for protected cell company applicants.
Insurance commissioner Wayne Goodwin commented: “North Carolina has joined the top tier of captive licensing jurisdictions, significantly reduced the regulatory burden on existing captive insurance companies, and made the state more competitive to North Carolina business owners establishing their own captive insurance companies, as well as encouraging non-resident captive insurance companies to re-domicile to North Carolina."
Jesse Coyle, chair of the North Carolina Captive Insurance Association, added: “With over 300 licensed captive insurance companies, generating more than $700 million dollars in annual premium dollars, it's only a matter of time before this is a billion dollar industry for North Carolina. Captives are creating jobs and having a positive impact on the state's economy."
