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 the $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.
The North Carolina captive programme, which launched in 2013, reported that in 2015 it saw economic benefits reach $15.3 million. For 2014 and 2015, the total North Carolina economic impact was $18 million with the creation of 50 new jobs.
Debbie Walker, Deputy Commissioner of the North Carolina Department of Insurance, commented: “[The amendments] are currently being considered by the general assembly and appear to be moving through the process quickly.”
“We treat our act as a living document monitoring it on a regular basis and making changes as we feel are appropriate to remain relevant and competitive.”