The new bill, introduced to the legislature on 13 February, will provide dormant captive insurance fees and requirements if it comes into effect.
The bill, sponsored by senator Daniel Salomon, defines a dormant captive as a captive insurance company, other than a risk retention group, that has ceased transacting the business of insurance, including the issuance of insurance policies. and has no remaining liabilities associated with insurance business transactions or insurance policies issued prior to the filing of its application for a certificate of dormancy.
A dormant captive will possess and maintain unimpaired, paid-in capital and surplus of no less than $25,000 within 90 days of each fiscal year end, and submit a report to the insurance commissioner of its financial condition.
The dormant captive will also have to pay $1,000 annual dormancy tax due on or before 1 March of each year for any portion of the preceding year in which the captive held a certificate of dormancy.
Dormant captives will also be exempt from the insurance commissioner’s five-year audits.