South Carolina's Approach to Captive Insurance Growth and Regulation

What distinguishes a well-developed captive insurance program from one that may require additional regulatory scrutiny? In this episode of The Edge of Risk podcast by IRMI, host Joel Appelbaum speaks with Andrew "Andy" Noga, director of captives at the South Carolina Department of Insurance, about the state's approach to captive insurance regulation and the factors that contribute to a sustainable captive market.

Mr. Noga discusses why South Carolina emphasizes the quality of captive applications, including well-supported feasibility studies, credible risk management plans, appropriate capitalization, and clear long-term business objectives. He explains how the department evaluates prospective captives, works with captive managers and owners, and monitors financial and operational developments after licensing.

The conversation also examines how South Carolina balances regulatory responsiveness with financial oversight, including the use of financial ratios, industry research, and company-specific information to identify potential concerns. Looking ahead, Mr. Noga discusses the implications of artificial intelligence and predictive analytics for captive insurance regulation, as well as his concerns about increasing private equity involvement in the captive market and the potential for greater regulatory attention.