Despite occasional regulatory challenges, other states have introduced legislation establishing a captive industry for the purpose of competing, through regulation, for a share of other states’ domestic captive market. While the NAIC struggles to find just the right mix of regulatory prohibitions, states are aggressively expanding captives’ use.
Legislation introduced in states regarding the use of Captives:
- Maryland: In February of this year, HB 1205 was introduced in the Maryland State House. This bill would require the “Maryland Insurance Administration to study and examine methods to establish and properly regulate a captive insurer industry in the State.”
- Oklahoma: At the end of last month, Oklahoma’s House and Senate passed legislation to modify its regulation of Captives in an effort to become a “preferred captive domicile.” The state also created the Oklahoma Captive Insurance Association (OCIA).
- North Carolina: At the end of March, North Carolina introduced H473/S476, this legislation would “establish the procedures for the organization and regulation of the operations of captive insurance companies within this State.”
- South Dakota: In March, South Dakota’s Governor signed legislation, HB 1061, that lowers the tax on gross premiums paid by captive insurance companies and changed the due date for the annual report on the financial condition of captive insurance companies. These changes will take effect on July 1, 2013.
- Florida: The Florida State House is currently considering HB 1191, which would revise Florida’s law on Captive Insurance companies by permitting an industrial insured captive insurance company that meets capital requirements to continue to write workers' compensation and employer's liability insurance in excess of $25 million; requiring risk management standards for controlled unaffiliated business; and exempting captive insurance companies from deposit requirements that now exceed the surplus requirements to form a captive.
- Ohio: This week, a bill, HB 117, was introduced in the Ohio House that would allow the formation of captive insurance companies.