Governor John Carney (D) of Delaware has signed Senate Substitute 1 for Senate Bill 36 to allow captive structures to be classified as registered series.
This will provide flexibility and transparency for the captive insurance division of the Delaware Department of Insurance, as the legislation also clarifies provisions around insuring a parent company.
Furthermore, the new legislation permits a captive to enter dormancy after 12 consecutive months of inactivity, rather than a calendar year of inactivity.
This is designed to encourage captives to elect dormancy and later return to the market, rather than continuing to pay premium taxes and submit statements in order to be eligible for the calendar year provision, and then potentially dissolve.
The legislation was sponsored by Senator Trey Paradee and Representative Bill Bush. The department also communicated with the Delaware Captive Insurance Association (DCIA) over the proposals.
Joanne Shaver, president of the DCIA, comments: “The DCIA thanks Governor Carney, the sponsors of the bill, and insurance commissioner Trinidad Navarro for their support of the captive insurance industry.”
She continues: “The DCIA believes these changes are beneficial to captive owners, especially with respect to Delaware’s dormancy statute. This change will make it more favourable for captive owners to elect dormancy status over dissolution of the captive, especially when the owner is not 100 per cent sure they want to dissolve their captive immediately.”
“We continue to work to streamline processes to maintain our status as one of the most attractive captive domiciles,” Navarro adds.
