Delaware


When taking up the position of commissioner at the Department of Insurance in 2009, what did you plan to achieve?

My intent was to make Delaware a world-class captive insurance domicile. Today, Delaware is the third largest captive domicile in the US and the sixth largest in the world. While I am pleased with the progress made, I continue to strive to make Delaware the best domicile.

How has Delaware changed as a domicile since 2009?

Delaware has changed with the creation of a dedicated captive bureau during the 2008/2009 financial global crisis.

At that time, I strategically reviewed and assessed peer-reviewed suggested changes to the existing captive domicile. I also was able to attract talented staff who shared my vision and goals in creating and regulating a world-class captive domicile.

After licensing 1,000 captives, what would you say has been the key to Delaware’s success?

There have been a number of keys to our overall success. Delaware has long been known as the favoured state of incorporation for US businesses. Delaware offers many benefits to traditional businesses. More than a million business entities are incorporated here, including 65 percent of the Fortune 500. These benefits extend to captive entities as well, creating the ideal domicile for captive business.

More than any other state, Delaware provides a variety of legal forms of organisation that a captive insurance company may take.

Captive insurers may organise as limited liability companies, partnerships, limited partnerships or statutory trusts.

A company may consider utilising a foreign entity, offering expanded structural flexibility.

Of course, Delaware’s highly respected corporations court, the Court of Chancery, has a long history of handling business and corporate issues.

Don’t let me forget the insurance department’s captive bureau. Director Steve Kinion and his staff are dedicated to serving and regulating all of our captive entities. Our team is knowledgeable and hard working. As our colleagues in the Delaware Captive Insurance Association (DCIA) like to say, Delaware has traditional insurers, licensed captives, licensed series business units and regulators who know the difference.

I should also mention that the DCIA has been a great partner with us in helping captive companies get a running start and navigate Delaware’s legal landscape.

Finally, Delaware’s General Corporation Law has been a model for many other states, and our Court of Chancery’s case-by-case application of it has created a common law of corporations that is respected and accepted throughout the country.

Delaware’s corporate jurisprudence has greatly benefitted our reputation as a stable and predictable place for captives to do business.

Has 2015 been a good year for Delaware? How many captives have you licensed and what types of captives have you signed up?

We do expect it to be a good year for new applications. To date, we have licensed 35 entities: 20 pure captives and 15 series captives. However, because Delaware permits the filing of captive applications until the very end of 31 December, we always have a last minute rush of electronic filings, which makes it difficult to predict the final number.

What separates Delaware from its onshore competitors?

Delaware offers a streamlined application process for prospective captive entities. One need only file a single application document, and our staff is happy to help you get started. The captive does not need to be formed under Delaware state law.

Delaware also permits applicants from outside the US to use International Financial Reporting Standards (IFRS), which enable the captive to file financial statements in Delaware using the same accounting standard as its parent company.

The use of IFRS also allows the parent to use one company-wide accounting standard.

What plans do you have to ensure Delaware’s success continues?

Many companies from around the world do business in the US and therefore have risks stemming from that activity.

Because Delaware is a leading domicile for US and international business entities, many of those same companies already have a presence here.

We hope to convince those international entities to explore the advantages of forming a Delaware captive to handle those risks.

We will continue to reach out to firms in Europe, Africa and Latin America to let them know that Delaware is open for business.
Domicile profiles
The latest domicile profiles from Captive Insurance Times
Tennessee’s governor, commissioner, general assembly and business community have all worked together to create ‘explosive growth’ in the state’s captive insurance industry. Julie Mix McPeak explains more
Newly-appointed chairman of CCIA Michael Maglaras suggests that the future is bright for state’s captive industry
Asset Servicing Times

Visit our sister site
for all the latest asset servicing news and analysis

assetservicingtimes.com
Although the Isle of Man is currently focusing on updating its regulatory framework, Solvency II, Brexit and the Asian market all hold big opportunities for the island
Debbie Walker of the North Carolina Department of Insurance tells Becky Butcher why the state is among 2017’s standout performers
Experts convene to talk to Becky Butcher about the stability that Guernsey represents in a challenging financial and political environment
In an era of increasing uncertainty, Tamatoa Jonassen suggests that the Cook Islands can be a bridge to financial security in a captive
With a dedicated captive plan in place, the Lone Star State is on the rise, says Josh Magden of the Texas Captive Insurance Association
After 36 years of captive business, Vermont boasts a culture of legislative change, and still has a few tricks up its sleeve. Dan Towle and David Provost explain
Features
The latest features from Captive Insurance Times
Jeremy Colombik of MSI and NCCIA chair explains to Becky Butcher that Notice 2016-66 could be detrimental to not just North Carolina, but other domiciles that are home to smaller captives
Dan Towle, president of CICA and Zach Finn, professor at Butler University, discuss their new professional development partnership, which will see students learn about the variety of career opportunities in captive insurance
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Alan Cabello of AGCS discusses blockchain technology, captives and the future
Alan Fine of Brown Smith Wallace explains how the industry should proceed after the Avrahami court case ruling
Dana Hentges Sheridan, general counsel and chief compliance officer at Active Captive Management, provides insight into the differences between business risks and insurance risks
Predicting when interest rates will change is difficult, which is even more reason to maintain a disciplined approach to your investments, according to Stephen Nedwicki of Comerica Bank
Looking ahead to 2018, Phillip Giles of QBE North America predicts continued uncertainty for the healthcare reform
Michael Schroeder of Roundstone explains why transparency, control and cost savings are the secret sauce offered by a medical captive
Interviews
The latest interviews from Captive Insurance Times