At the same time, Delaware captive regulators are highly experienced. Indeed, Steve Kinion, director of Delaware's Bureau of Captive and Financial Institutions in Wilmington, has been the state's top captive regulator since 2009.
That experience is a big plus, Mr. Kinion notes.
"Captive managers like doing business with regulators they know. When they know you, they feel comfortable in reaching out to present their captive insurance ideas. That is why I make myself accessible 7 days a week," Mr. Kinion said.
Yet another appeal of Delaware as a captive domicile is the willingness and ability of state legislators to consider and pass legislation to update the state's captive statute.
For example, in 2018, state lawmakers passed legislation that gives captives 6 more weeks—until April 15—to file annual statements and pay premium taxes.
The new filing deadlines "will be very helpful. It had been difficult to gather all needed information to make the prior deadline," Ms. Shaver said.
The additional time "really has made a positive difference," concurred Melissa Hancock, a director with Strategic Risk Solutions in Washington.
Another measure—also passed during the 2018 legislative session—will be a boon to new captives. Under the new law, the state insurance commissioner has authority to issue conditional certificates of authority to allow new captives to begin operations while the captives' applications are being reviewed by regulators.
"You can begin business right away," the DCIA's Ms. Shaver said.
"It is a great feature if you need your captive to do business right away," said Victoria Fimea, a former senior vice president with Artex Risk Solutions in Mesa, Arizona.
Delaware captive regulators agree with that assessment. "We created the conditional licensing program, which continues to employ regulatory safeguards, but is a much more streamlined process. The captive industry has responded very positively to this creative solution, and the proof is in the numbers," said Delaware Insurance Commissioner Trinidad Navarro.
Delaware captive regulators expect growth to continue. "We expect higher growth in 2022 than prior years as interest in captive insurance companies is growing due to increased prices in the hardening market," regulators said in a statement.
Delaware captive premium taxes are modest. Direct written premiums are assessed a flat 0.2 percent tax, while a flat 0.1 percent tax is assessed on reinsurance premiums.
Additionally, a $200,000 tax cap is set on direct premiums and a $110,000 tax cap is set on captive reinsurance premiums.
However, in the case of a captive employing at least 25 full-time employees in Delaware, captive premium taxes are capped at $50,000.