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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance explores the challenges presented by today's business and economic upheaval, as well as the hardening insurance market, and what it means for the captive insurance industry.

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Captive Insurance Legislation Amended in Delaware

Pen Signing Document
July 08, 2015

Delaware Governor Jack Markell has recently signed House Bill 15, which amends the state's captive legislation in various ways, one of which is to allow Delaware-domiciled captive insurance companies to apply for membership in the Federal Home Loan Bank system.

After the legislation was enacted, Delaware Insurance Commissioner Karen Weldin Stewart and US Senator Tom Carper highlighted the event in conjunction with a celebration of Stepping Stones Community Federal Credit Union‘s joint efforts with the Federal Home Loan Bank of Pittsburgh to increase affordable housing dollars for the Wilmington community.

Ms. Stewart  stated she is "always looking for new ways to benefit my constituents. By coupling the FHLBanks and insurance companies, I am increasing the pool of money available for affordable housing opportunities to improve the lives of many Delawareans.” Read the press release for more of her comments and details.

Besides clarifying that captive insurance companies may become members of the Federal Home Loan Bank system, the legislation:

  • Updates the regulation of risk retention groups to meet National Association of Insurance Commissioners (NAIC) accreditation requirements

  • Defines a captive insurance company incorporated as a nonstock corporation, in which the policyholders are the members, as a mutual insurer

  • Provides the minimum capital and surplus funds may be a surplus note subject to the approval of the insurance commissioner

  • Adds foreign branch captive

  • Adds a definition of series captive insurance company

  • Adds a new definition and licensing category for series captive insurance company so that series as established in 6 Del. C. § 17-215(b), 6 Del. C. § 218(b), and 12 Del. C. § 3804(a) can be defined as captive insurance companies

  • Increases the captive insurance application fee from $200 to $300

  • Increases the captive insurance processing fee from $3,000 to $3,200

  • Increases the annual captive insurance license renewal fee from $300 to $400

  • Makes the premium tax caps for direct business $200,000 and assumed business $110,000 and sets the aggregate cap to $200,000

  • Adds an annual minimum aggregate tax of $3,500 for each series captive insurance company

  • Removes the tax benefit for common ownership and control of a captive insurance company

  • Clarifies that the Delaware insurance commissioner can retain legal, financial, and examination services for conducting regulatory reviews, processing, investigations, and examinations and the reasonable expense may be charged to the captive insurance company

  • Indicates the minimum capital and surplus for a series captive insurance company

During Ms. Stewart’s administration, the captive division has grown from 38 companies in 2009 to more than 1,000 entities.

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