North Carolina Insurance Commissioner Mike Causey today announced that North Carolina’s flourishing captive insurance program had an estimated $30 million impact on the state last year.
“North Carolina’s captive insurance law, while providing for appropriate regulation, allows companies to form and operate their own insurance companies without getting tangled up in unnecessary red tape,” Commissioner Causey said. “Other businesses and organizations may want to check out our business-friendly environment and form or relocate their own captive insurance company in North Carolina.”
Captive insurance is a form of self-insurance through which a business may form its own insurance company to manage its risks.
There are many reasons why captive insurance may be beneficial to a business. These include the ability to obtain insurance coverage that is not readily available or is too costly in the commercial market, reduction of insurance costs, stabilized pricing, and customization of the terms and conditions of insurance products to meet the insured’s needs.
The $30 million estimate comes from a recently completed study by the N.C. Department of Insurance on the economic impact of the state’s captive insurance company program. The impact was generated by premium taxes paid to the state by licensed captive insurers as well as service provider and hospitality revenues generated by North Carolina businesses for services they provide to the captive insurance industry.
North Carolina’s law requires captive insurance companies domiciled in the state to either hold one board of directors meeting in the state or use at least two North Carolina service providers, such as CPAs, attorneys, or actuaries, thus generating an economic impact in the state.
North Carolina’s captive insurance program has grown since its inception in 2013. The amount that the program has impacted the state’s economy has also increased annually.
The 2017 impact of $30 million is significantly greater than the 2016 economic impact of $23 million, the 2015 economic impact of $15.3 million, and the 2014 economic impact of $2.5 million. That’s nearly a $71 million impact in the four years since the N.C. General Assembly established the captive insurance program.
In other news regarding the state’s captive insurance program:
- Commissioner Causey also reported that the N.C. Department of Insurance’s captive program is one of six state states on the short list for the U.S. Captive Domicile of the Year award. North Carolina was one of five states to make the short list in 2017.
- The upcoming N.C. Captive Insurance Association Conference will feature news about the state’s captive insurance program. The NCCIA conference will be held Aug. 20-22 in Charlotte. The NCDOI captive insurance team will participate in the conference. Highlights from the team at the conference include:
- Senior Deputy Commissioner Debbie Walker will provide, along with others from the industry, an introductory captive insurance seminar on Aug. 20.
- Chief Deputy Commissioner Michelle Osborne, Walker, and the captive insurance regulatory team will provide a presentation discussing captives in North Carolina to kick off the main part of the conference on Aug. 21.
- Leanne Rafalko, chief captive analyst, will participate in a breakout session panel discussion about captive investment alternatives on Aug. 21.
- Insurance Commissioner Mike Causey will speak during the Commissioner’s Luncheon on Aug. 21.
The N.C. Department of Insurance will also have an exhibit at the conference. Team members will be available for meetings with anyone wanting to discuss the state’s captive insurance program. For more information on the conference, go to: http://nccia.org/2018-nccia-conference-schedule/.
Learn more about the N.C. captive insurance program at www.nccaptives.com.