District of Columbia Department of Insurance, Securities and Banking

Washington, DC, is not only the US capital; it also is one of the oldest and largest captive insurance company domiciles in the United States.

District of Columbia lawmakers passed the captive statute back in 2000 and since then the domicile has grown significantly. In 2019, 148 captives were licensed in the District of Columbia, up from 128 in 2015.

Captive sponsors and others say there are several reasons, including a top regulatory staff, for why they selected the District of Columbia.

"There is a dedicated group of regulators, with outstanding experience," said Jim Caldwell, CEO in Libertyville, Illinois of Caring Communities a Reciprocal Risk Retention Group, which was licensed in the District of Columbia in 2005 and provides coverages to several dozen not-for-profit senior retirement communities.

"They are very willing to discuss issues and work out solutions," said Michael Coulter, deputy managing director in the Charleston, South Carolina, office of Aon Captive and Insurance Management.

"The regulators are great to deal with. They are very up front about their positions," noted Jon Harkavy, executive vice president and general counsel for captive and risk retention group manager Risk Services L.L.C. in Washington, DC.

Captive sponsors agree with that assessment. Regulators are "very responsive, easy to work with, knowledgeable, and  very communicative," said Courtney W. Claflin, executive director of  captive programs at the University of California-Office of the President in Oakland. The University of California has several captives in the District of Columbia.

In addition, the regulators "have a great relationship with our captive manager," Mr. Claflin said.

The District of Columbia's top captive officials agree that the domicile's regulatory staff is tops. "Our staff is unsurpassed in terms of knowledge and expertise," said Dana Sheppard, District of Columbia's acting deputy commissioner and associate commissioner of the Risk Finance Bureau.

In addition, Mr. Sheppard notes, the District of Columbia has a very modern and flexible captive statute.  "Those are two key things captive sponsors want," he said.

At the same time, while some domiciles have not been receptive to risk retention groups (RRGs), a special type of captive first authorized under a 1981 federal law and that can provide all commercial casualty coverages, except workers compensation, to policyholder-owners, the District of Columbia is very open to RRGs.

"We continue to have quite a few RRGs. They can be a useful and powerful risk management tool," Mr. Sheppard said, adding that about three dozen RRGs are domiciled in the District of Columbia.

Captive premium tax rates in the District of Columbia are modest, with a 0.25 percent tax rate on the first $25 million of direct premiums, 0.15 percent on premiums between $25 million and $50 million, and a 0.05 percent tax rate on premiums exceeding $50 million. RRGs pay slightly higher premium taxes.

The minimum annual tax for captives is $7,500, with a $100,000 maximum, while the minimum tax for RRGs is $15,000, with a $100,000 maximum.

Compared to many other domiciles, the District of Columbia's captive premium taxes "are in line or are slightly lower," said Donna Weber, managing director and head of pooling and protected cell facilities with Marsh Captive Solutions in Melville, New York.

Company Contacts

Associate Commissioner, Risk Finance Bureau
202-442-7820

Mailing Address:
1050 First Street NE, Suite 801
Washington, DC 20002
(202) 442-7820

Captive Domicile Summary

Washington, DC—the District of Columbia—holds a unique position among the captive domiciles. In addition to being the nation's capital and a global crossroads for diplomats, political leaders, and world financial and business leaders, it is home to hundreds of national and international associations representing industry, trade, and professional groups. The District's multinational business environment and its enormous information resources from national trade associations and federal agencies make it an attractive location.

The District of Columbia licensed its first captive insurer in 2001. The Department of Insurance and Securities Regulation touts an efficient regulatory approval process and an experienced staff committed to working with captive owners.

The Captive Insurance Council of the District of Columbia, Inc., was formed back in 2001 to represent the corporate and association community interested in operating captive insurance companies in the District of Columbia. The Council also holds conferences to keep members informed on captive issues.

Meetings cover a range of topics, including the advantages of setting up a captive insurance company.

More information about the Council is available on its website.

Captive Domicile Statistics

Total Captive Count* District of Columbia
Year Captives
2019 148
2018 154
2017 140
2016 135
2015 128
*Includes active and inactive captives and cell captives.
Captives' Gross Written Premiums District of Columbia
Year Premium Volume
2019 $1.7 billion
2018 $1.4 billion
2017 $5.0 billion
2016 $787.4 million
2015 $742.0 million