Why Go Captive?


Captive Feasibility | Steve Kinion | Director | Bureau of Captive and Financial Insurance Products, Delaware Department of Insurance


According to Steve Kinion, director with the Bureau of Captive and Financial Insurance Products at the Delaware Department of Insurance, Why go captive? is a question to be answered by state-level policy makers, state-level insurance commissioners, and state-level insurance regulators. It is also a question that can be described as, why should a state become a captive insurance domicile?

Mr. Kinion describes four models for captive insurance domiciles at the US state level that are what he categorizes as the external model, the internal model, the hybrid model, and the "not a captive insurance domicile at all" model. He advises that deciding to adopt a captive insurance statute requires that there is a good rationale for doing so. That rationale can be economic development; it could also be to enhance tax and feed revenue for the state; or it could be to allow service providers to provide better services.