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LEGISLATIVE UPDATE
New Jersey Bill to Regulate Captive Insurers Passes Assembly
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Trenton, NJ, June 28, 2010: In an assembly meeting that
continued into the hours past midnight, Assembly Bill A2360 to Regulate
Captive Insurers passed with amendments. The bill, sponsored by Assemblyman
Gary Schaer, Assemblywoman Denise Coyle, and Assemblyman John McKeon,
brings New Jersey another step closer to becoming a captive insurance
domicile.
The senate version of the bill (S168) remains with
the Senate Finance Committee which was originally sponsored solely by
Senator Nia Gill but now has the additional co-sponsorship of Senator
Thomas Kean, Jr. Gregg Sgambati, President of the New Jersey Captive Insurance
Association (NJCIA) says that if bill S168 can move out of the Senate
Committee at one of the upcoming committee meetings, we could see New
Jersey become a captive domicile this year. The addition of Senator Thomas
Kean, Jr. as a co-sponsor will add momentum to the bill’s progress.
Senator Kean has sponsored other economic bills that he says, “meet
the challenges of the 21st century economy and workplace.”
The assembly bill was passed without the inclusion of risk retention groups.
Risk retention groups (RRGs) account for around 15% of captive insurance
company formations. “Although not having RRGs in the legislation
is not ideal, it should not be misconstrued as an indication of low enthusiasm
for this legislation by state regulators, who are in fact, very enthusiastic
about captive insurance”, said Sgambati. “This is a stepped
approach to ramping up a promising new domicile.”
NJCIA will continue to promote the merits of including RRGs in the Senate
version of the bill which currently has language that includes them. RRGs
are often the first captive insurance companies to form in a new domicile.
NJCIA’s first goal is to see the passage of captive legislation
that will make New Jersey a captive insurance domicile. With each step
closer to captive legislation, NJCIA continues to increase activities
to promote captive insurance in New Jersey. Please visit the new NJCIA
website for information about association membership and committee participation
at www.njcia.org or contact Gregg Sgambati at (201) 252-2444 or gregg.s@njcia.org.
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