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Domicile profiles:
the US jurisdictions
A directory of rules and regulations affecting
captives in the leading US captive domiciles.
April 2007
Usually, extracting information from the States on their captive
activities can be a difficult task. US Captive therefore offers its
gratitude to the insurance regulators in most of the active US captive
jurisdictions, who responded to enquiries for this directory.
The information that follows was current at or near the end
of March.
Capital: Capital and surplus for a pure captive is $250,000. Group
captives, including RRGs, agency captives and protected cell captives:
$500,000. Reciprocal: $500,000 in free surplus reinsurance only;
half of the above in cash or letters of credit (LOCs).
Expenses: Charter documents cost $75. Annual licence fee: $1,000
for the first year. The examiners’ revolving fund costs $100 a year.
The cost of an initial examination varies by captive, as do ongoing
examinations. Annual renewal fee: $5,500.
Investments: A pure captive insurer is not subject to restrictions on
allowable investments but must file a proposed plan with the Captive
Insurance Division (CID). Only a pure captive insurer may make
loans back, on written approval by the Director of the CID.
Tax: The State levies no premium taxes, direct or assumed.
Reporting: All captives must file an annual report. Quarterly NAIC
reports are required for RRGs.
Local office: A captive insurer must engage a manager who is an
Arizona resident. The captive manager must maintain the books and
records of the captive insurer’s business, transactions and affairs at
a location in Arizona, which is accessible to the Director of the CID.
The Director may require a captive insurer to discharge a captive
manager for failure to substantively fulfill the captive manager’s
duties under this article.
Regulator: Arizona Department of Insurance, Rod Morris, Captive
Insurance Administrator, 2910 North 44th Street, Suite 210, Phoenix,
Arizona 85018. Tel: (602) 364-4491. rmorris@azinsurance.gov
Website: http://www.id.state.az.us/
Capital: Pure captives or producer reinsurance captives must have
a minimum of $100,000. Industrial insureds: $200,000. Association
captives: $400,000. Sponsored captives: $500,000.
Surplus: For a pure captive: $150,000. For a producer reinsurance
captive: $100,000. For an industrial insured (stock): $300,000. For
an industrial insured (mutual): $500,000. For an association captive
(stock): $350,000. For an association captive (mutual): $750,000.
For a sponsored captive: $500,000. For a reciprocal insurer:
$1,000,000.
Expenses: Application fee: $200. Licence fee (when issued):
$300. Annual licence renewal fee: $300. An actuarial review of an
application is charged to the applicant at the Department’s cost.
Tax: Captives must pay premium tax, with a $5,000 minimum, for
direct or reinsurance, based on gross premiums written. Under $20 million, the rates are 0.40% or 0.225%, respectively. Between
$20 million and $40 million, rates are 0.30% or 0.15%. Between
$40 million and $60 million, rates are 0.20% or 0.05%. Above
$60 million, rates are 0.075% or 0.025%. Producer reinsurance
captives do not pay premium tax if they keep 50% or more of their
assets in Arkansas obligations. Two or more captive insurance
companies under common ownership and control are taxed as a
single entity.
Reporting: A report of the captive’s financial condition must be
submitted by March 1 of each year, or within 60 days of the fiscal year
end, if requested by the Insurance Commissioner. The submission
must be verified by an oath from two of the executive officers. The
report must use generally accepted accounting principles (GAAP),
unless otherwise approved. An annual audit must be performed for
the year ending December 31 of the year proceeding.
Local office: The captive’s principal place of business must be in
Arkansas or it must maintain the principal place of business for
branch operations in the State. A resident registered agent must be
appointed to accept service of process and to act on the captive’s
behalf in the State. At least one board of directors’ meeting must be
held in Arkansas each year.
Regulator: Jay Morgan, Arkansas Insurance Department, 1200 West
Third Street, Little Rock, Arkansas 72201. Tel: (501) 371-2600 or
(800) 282-9134. jay.morgan@arkansas.gov
Website: http://www.accessarkansas.org/insurance/
Capital: Pure and group captives must have capital of at least
$500,000.
Expenses: An application fee of $500 and an annual fee of $925.
Tax: 0.5% of the first $25 million, plus 0.25% of the next $50 million,
plus 0.1% thereafter. Also, 0.25% of the first $20 million, plus 0.1%
thereafter of assumed reinsurance premiums (with a minimum tax
of $5,000).
Local office: The captive’s principal office must be in Colorado.
The use of a local manager is required. Records must be kept in
Colorado.
Regulator: Deborah Hulstrom, Financial Credit Examiner, Colorado
Division of Insurance Department of Regulatory Agencies, 1560
Broadway, Suite 850, Denver, Colorado 80202. Tel: (303) 894-7475.
deborah.hulstrom@dora.state.co.us
Website: http://www.dora.state.co.us/insurance/index.htm
Capital: For a pure captive, an association captive (stock), an agency
captive or a rent-a-captive: $100,000. For an association captive
(mutual or reciprocal): $500,000.
Surplus: For a pure captive: $150,000. For an association captive
(stock): $300,000. For an association captive (mutual or reciprocal):
$500,000. For an agency captive: $300,000. For a rent-a-captive:
$300,000.
Expenses: A non-refundable application fee of $500 is charged. The
fee for a certificate of authority is $300. The Insurance Department will
process properly documented applications in not more than 30 days.
An annual renewal fee of $300 applies.
Investments: All captives must file a proposed investment plan with
the Commissioner.
Tax: For direct or reinsurance business, the first $25 million is taxed at
0.225%. The next $25 million is taxed at 0.150%. Above $50 million,
the tax is 0.050%. A minimum tax of $10,000 applies to RRGs and a
minimum tax of $7,500 is levied for all other captives.
Reporting: RRGs must file quarterly financial statements on an
NAIC Yellow Blank, on a GAAP Basis. All other captives file annual
statements on a DC Blank, also on a GAAP basis. All captives must file
annually an actuarial opinion as to the adequacy of the company’s loss
reserves and an audit prepared by an independent auditor approved
by the Department.
Underwriting: Direct insurance is permitted, as is excess workers’
compensation insurance to the captive’s parent and affiliates.
Reinsurance is permitted. The captive may provide on risks ceded
by another insurer and may take credit reserves on risks ceded to
a reinsurer. Insurance provided on any qualified plan for workers’
compensation of the captive’s parent or affiliates in which the insurance
is provided as a self-insurance plan is permitted.
Local office: An office must be maintained in DC and at least one
directors’ meeting held there annually. The use of a resident agent is
required. Financial records must be kept in DC, unless waived by the
Commissioner.
Regulator: Dana Sheppard, Director, Risk Finance Bureau, DC
Department of Insurance, Securities and Banking, 1400 L Street
NW, Suite 400, Washington, DC 20005. Tel: (202) 727-5074.
Fax: (202) 727-1290. dana.sheppard@dc.gov
Website: http://www.dccaptives.org/
Capital: For Class 1, pure captives that write business only as a
reinsurer: $100,000. For Class 2, pure captives that can be reinsurers
and/or direct writers: $250,000. For Class 3, association captives
or RRGs: $750,000. For Class 4, leased capital facilities (protected
cells): $1,000,000. For Class 5, reinsurance captives at the discretion
of the Insurance Commissioner, generally, a 3:1 ratio of net premium
to capital applies.
Expenses: A $1,000 application fee is levied. Licence fees are as
follows: $300 for Class 1 or 2; $500 for Class 3; and $1,000 for Class
4 or 5.
Investments: The same investment restrictions apply as for commercial
insurance companies in the State, except that the Commissioner may
approve other investments as appropriate.
Tax: On the first $25 million of gross premiums: 0.25%. Between $25
million and $50 million: 0.15%. Above $50 million: 0.05%. Taxes are
due on or before March 1 of each year.
Local office: One board of directors’ meeting must be held in Hawaii
annually. The principal office must be in Hawaii. The use of a local management company and lawyer is advised. Books and records
must be kept in Hawaii.
Regulator: Craig Watanabe, Captive Insurance Administrator,
State of Hawaii, Department of Commerce and Consumer Affairs,
Insurance Division, 335 Merchant Street, Room 213, Honolulu,
Hawaii 96811. Tel: (808) 586-0979. Fax: (808) 586-0987.
captiveins@dcca.hawaii.gov
Website: http://www.hawaii.gov/dcca/areas/ins/other_ins/captive_
insurance/
Capital: Minimum capital of $2 million must be maintained. Of that
amount, 80% may be by letter of credit (LOC) or 67% by contractual
obligations. A minimum of $300,000 must be in cash or equivalents.
Expenses: A $3,500 application fee applies.
Tax: No minimum premium applies. No premium tax is levied. A 6.5%
income tax applies to Illinois net income only.
Underwriting: Individual risks (except those reinsured) may not
exceed 10% of capital and surplus (which may be waived by the
Commissioner).
Local office: An administrative office must be maintained in Illinois, but
the principal office may be elsewhere. A registered agent is required;
original financial records, or copies, must be maintained in Illinois.
Regulator: Financial Corporate Regulatory, Division of Insurance,
320 W. Washington Street, Springfield, Illinois 62767.
Tel: (217) 782-1757. Fax: (217) 524-2271.
Capital: The minimum capital and surplus for pure captives is
$250,000. For consortium or association captives: $750,000. For
industrial captives or RRGs: $500,000. For sponsored captives:
$1,000,000. For agency captives: $250,000. For special purpose
captives: $250,000.
Expenses: For registration and incorporation, a $600 fee applies.
Tax: A captive insurer tax is paid in lieu of other State taxes, on or before
March 1 in each year, at the rate of 0.4% on the first $20 million; 0.3%
on the next $20 million; 0.2% on the next $20 million; and 0.075% on
each dollar thereafter. Minimum tax of $5,000 applies.
Reporting: A captive annual statement is required, as are audited
financial statements. RRGs file quarterly NAIC statements.
Local office: The insurer or manager must maintain a principal place
of business in Kentucky, be subject to service of process, and maintain
the books and records of the captive insurer’s business, transactions
and affairs at a location that is accessible to the Executive Director.
Regulator: Russell Coy, Captive Coordinator, Financial Standards
and Examination Division, Kentucky Office of Insurance.
Tel: (502) 564-6082 extn. 4256. Russell.Coy@ky.gov
Website: http://captive.insurance.ky.gov
Capital: Minimum capital for pure captives is $100,000. For industrial
insureds (stock): $200,000. For surplus industrial insureds (mutual):
$500,000. For association captives (stock): $400,000.
Surplus: Minimum surplus for pure captives is $150,000. For industrial
insureds (stock): $300,000. For industrial insureds (mutual): $500,000.
For association captives (stock): $350,000. For association captives
(mutual): $750,000.
Expenses: A $1,000 initial fee, $100 licence fee and $100 financial
statement filing fee apply. A fee of $500 is levied on captives that
redomesticate to Maine.
Tax: A tiered gross premium tax applies to direct reinsurance.
Underwriting: An annual actuarial opinion on reserves is required. No
other restrictions apply.
Local office: One board meeting must be held in Maine annually. The
principal place of business must be in Maine, and a resident agent must
be appointed.
Regulator: Maine Bureau of Insurance, 34 State House Station, Augusta,
Maine 04333-0034. Tel: (207) 624-8468. Fax: (207) 624-8599.
Website: http://janus.state.me.us/legis/statutes/24-A/title24-Ach83sec0.
html
Capital and surplus: A pure captive insurance company must maintain
paid-in capital and surplus of $250,000; an industrial insured captive
insurance company, $500,000; and an association captive insurance
company, $750,000. The Commissioner may require additional capital
and surplus based upon the type, volume and nature of insurance
business transacted. Capital and surplus may be in the form of cash
or an irrevocable LOC issued by a bank chartered by the State of
Montana or a member bank of the Federal Reserve and approved by the
Commissioner.
Expenses: A $200 application fee and a $300 licence fee.
Investments: Only a pure captive insurance company may make loans to
its parent company or affiliates, subject to the prior written approval of the
Commissioner.
Tax: On gross written premiums for direct or reinsurance up to $20 million,
a tax is levied of 0.40% or 0.225% respectively. Between $20 million
and $40 million: 0.30% or 0.15%. Between $40 million and $60 million:
0.20% or 0.05%. Above $60 million: 0.075%. A minimum of $5,000 in
premium taxes is payable.
Reporting: Captives must file, by March 1 each year, a report of their
financial condition in a form and manner required by the Commissioner.
Underwriting: Loss reserves and loss expense reserves must be certified by
a Fellow of the Casualty Actuarial Society, a member in good standing of the
American Academy of Actuaries, or an individual who has demonstrated
his competence in loss reserve evaluation to the Commissioner, who must
also approve an equally qualified actuary.
Local office: All books, records and other information necessary for a
statutory examination should be located in Montana.
Regulator: John Huth, Captive Coordinator State Auditor’s Office, State
of Montana, 840 Helena Ave., Helena, Montana 59601. Tel: (406) 444-
2040. Fax: (406) 444-3497. johuth@mt.gov
Capital: For pure captives, the minimum capital is $200,000. For
segregated cells: $500,000. For agency captives, whether stock, mutual
or reciprocal: $600,000. For rent-a-captives: $800,000. Generally, a 3:1
ratio of net premium to capital is required.
Expenses: A $500 application fee and a $300 registration fee are
applicable. If the Commissioner uses an outside application reviewer (at
an estimated fee of $5,000), the cost is borne by applicant. The captive
insurers’ annual continuation fee is $300.
Tax: No State income taxes are levied. Direct or reinsurance business
is taxed at 0.40% or 0.225%, respectively, on net premiums up to $20
million; at 0.20% or 0.150% between $20 million and $40 million; and
at 0.075% or 0.025% over $40 million. A minimum of $5,000 and a
maximum of $175,000 apply.
Underwriting: An actuarial opinion on reserves is required annually.
Discounting is sometimes allowed.
Local office: At least one annual board of directors’ meeting must be
held in Nevada. The captive’s principal office must be in Nevada. A local
management company and lawyer must be used. Books and records
must be kept in Nevada. A nationally recognised accounting firm must
carry out an annual audit.
Regulator: Alice A. Molasky-Arman, Commissioner of Insurance,
State of Nevada, Department of Business and Industry, Division
of Insurance, 788 Fairview Drive, Suite 300, Carson City, Nevada
89701-5491. Tel: (775) 687-4270. Fax: (775) 687-3937.
nsinfo@doi.state.nv.us
Website: http://www.doi.state.nv.us/cf-captiveinsurindex.htm
Capital: A pure captive must maintain capital of $100,000. Group
captives (stock): $200,000. Group captives (mutual): $500,000. The
Superintendent may require additional funding.
Surplus: A pure captive must maintain surplus of $150,000. Group
captives (stock): $300,000.
Expenses: A New York organisation tax of 0.5% on the amount of par
value of all authorised shares applies only to stock companies.
Investments: Capital of $250,000 and surplus of $500,000 must be held
in cash, US Government or New York State obligations, or LOCs. Loanbacks
to the parent require approval.
Underwriting: An actuarial opinion on reserves is required annually. The
requirement may be waived.
Local office: An office must be maintained in New York. One directors’
meeting must be held in New York annually. Two directors must be New
York residents. The use of a resident manager is required. Books and
records must be kept in New York
Regulator: Jody T. Wald, Captive Coordinator New York Department of
Insurance, 25 Beaver Street, Room 367, New York, New York 10004.
Tel: (212) 480-2757. Fax: (212) 480-2310. jwald@ins.state.ny.us
Website: http://www.captivesny.com
Capital: Minimum capital for a single parent is $100,000. For an
industrial insured: $200,000. For an association captive: $400,000.
Surplus: Minimum surplus for a single parent captive is $150,000.
For an industrial insured: $300,000 if stock, $500,000 if mutual. For
an association captive (mutual): $750,000.
Expenses: A $1,000 application fee and a $500 licence fee are
applicable.
Tax: No minimum premium applies to pure and association captives,
but a minimum aggregate annual premium tax of at least $25,000 is
levied on industrial insureds. A premium tax of 1.0% applies to gross
written premiums not otherwise taxed.
Underwriting: An annual actuarial opinion on reserves is required.
Discounting is allowed on workers’ compensation business.
Local office: Flexible in initial phases of operation for captives with
premium under $5 million, but a physical presence is required in the
State once operations grow.
Regulator: Joseph Torti, Associate Director/Superintendent of
Insurance, Department of Business Regulations, Insurance Division,
233 Richmond Street, Suite 233, Providence, Rhode Island 02903.
Tel: 401-22-5446. Fax: (401) 222-5475. jtorti@dbr.state.ri.us
Capital: See South Carolina Code 38-90-40 and 38-90-50 for
specifics on statutory minimum capital and surplus. Special purpose
financial captives (SPFCs) are governed by provisions of Article III
38-90-460.
Expenses: Application fee: $200. Initial insurance licence fee: $300.
Annual licence renewal fee: $500. Application review fee: $3,200.
Annual review for SPFCs: $12,000.
Tax: A captive insurance company must pay, by March 1 of each
year, tax at the rate of 0.40% on the first $20 million and 0.30%
on each dollar thereafter, up to a maximum of $100,000. Taxes
are based on the direct premiums collected or contracted for by
the captive. The rates for reinsurance are 0.225% on the first $20
million of assumed reinsurance premium, 0.50% on the next $20
million, and 0.25% thereafter, up to a maximum tax of $100,000.
Minimum taxes apply.
Local office: A captive must hold at least one board of directors’
meeting, or in the case of a reciprocal insurer, a subscriber’s advisory
committee meeting, each year in South Carolina. The captive must
maintain its principal place of business in the State and appoint a
resident registered agent.
Regulator: Clayton Ingram, Alternative Risk Transfer Services Division,
South Carolina Department of Insurance, Capital Center, 1201 Main Street, Columbia, South Carolina 29201. Tel: (803) 737-6188.
Fax: (803) 737-4976. cingram@doi.sc.gov
Website: www.doi.sc.gov
Capital: Minimum capital of $750,000 is required for single parent,
non-profit, municipality and utility district captives, and $1 million is
required for group captives.
Expenses: A $675 application fee is applicable. The annual minimum
fee is $5,000 for a single parent captive, $10,000 for group captives.
Any premium tax paid is counted against these minima.
Tax: A tax of 1.0% of gross direct written premiums is levied, which
includes out-of-State premiums that are not taxed by another State.
Underwriting: Individual risks may not exceed 10% of net capital
and surplus. Minimum premiums are $500,000 for single parent
captives and $1 million for group captives.
Local office: An office in Tennessee is required. One executive officer
must be a Tennessee resident. Records must be kept in Tennessee.
Regulator: Assistant Commissioner for Insurance, Department
of Commerce and Insurance, Davy Crockett Tower, 4th Floor,
500 James Robertson Parkway, Nashville, Tennessee 37243.
Tel: (615) 741-1633. Fax: (615) 532-2788.
Website: www.state.tn.us/commerce/insurance/index.html
Capital: Minimum capitalisation for a pure captive is $250,000. For an
association captive: $750,000. For an industrial insurer: $500,000.
For a sponsored captive or a captive organised as a reciprocal: $1
million.
Expenses: An application fee of $202 is payable. An application review
costs about $3,600. The initial licence fee costs $5,002. An annual
e-commerce fee costs $250. The renewal of a licence costs $5,002.
Tax: None.
Underwriting: An actuarial opinion is required to be filed with an annual
financial statement due March 1 of each year.
Reporting: Annual GAAP financial condition reports are due before
March 1 of each year. An independent CPA audit report is due June
30 of each year. Association captives and industrial insured captives
must submit the applicable NAIC Annual Statement Blank each year.
Local office: Captive insurance companies must hold at least one board
of directors’ meeting each year and maintain their principal places of
business in Utah. Captives must also appoint a resident registered agent
to accept service of process.
Regulator: Don Spann, CFE, Captive Insurance Director, Utah Insurance
Department, State Office Building, Room 3110, Salt Lake City, Utah
84114. Tel: (801) 537-9047. Fax: (801) 538-3829. dspann@utah.gov
Capital: For a pure captive: $250,000. For an association captive:
$750,000. For industrial insurers: $500,000. For RRGs: $1 million. For
sponsored captives: $1 million.
Expenses: A $200 application fee and a $300 licence fee apply. A $3,200
actuarial review ($4,000 from July 1, 2007) must be paid. Incorporation
fees vary.
Tax: Direct or reinsurance business up to $20 million is taxed at 0.38% or
0.21% of gross premiums written, respectively. From $20 million to $40
million, the rates are 0.285% or 0.14%. Between $40 million and $60
million, the rates are 0.19% and 0.05%. Above $60 million, the rates are
0.072% or 0.02%.
Underwriting: An actuarial opinion on reserves is required annually.
Discounting is sometimes allowed.
Local office: An office must be maintained in Vermont. At least one
directors’ meeting must be held in Vermont annually. The use of a resident
agent is required. Financial records must be kept in Vermont.
Regulator: Leonard D. Crouse, Deputy Commissioner of Captive
Insurance, Department of Banking, Insurance, Securities &
Health Care Administration, Vermont Department of Captive
Insurance, 89 Main Street, Drawer 20, Montpelier, Vermont
05620-3101. Tel: (802) 828-3304. Fax: (802) 828-3460.
len@thinkvermont.com
Website: www.vermontcaptive.com
Capital: For stock captives, $1 million of capital is required.
Surplus: For stock captives, $3 million is required. For non-stock captives,
$4 million of surplus is required.
Expenses: A $500 non-refundable application fee and registration fee are
required.
Tax: Premium tax of 2.25% is levied on business written in Virginia and
out-of-State business not taxed by another State.
Underwriting: Captive insurers are subject to the reserve requirements
applicable to domestic property and casualty insurers under Virginia law.
Local office: Captive insurers are required to maintain their principal and
home office in Virginia.
Regulator: Jim Ware Bureau of Insurance, Company Licensing
and Regulatory Compliance, Commonwealth of VA, PO
Box 1157 Richmond, Virginia 23218. Tel: (804) 371-9801.
Fax: (804) 371-9511. Jim.ware@scc.virginia.gov |
