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North Carolina's Captive Insurance Program Produces Rapid Economic Boost

North Carolina State 480x377
June 28, 2018

North Carolina Insurance Commissioner Mike Causey said that North Carolina's rapidly growing captive insurance program had an estimated $30 million economic impact on the state last year.

"North Carolina's captive insurance law, while providing for appropriate regulation, allows companies to form and operate their own insurance companies without getting tangled up in unnecessary red tape," Commissioner Causey said.

The $30 million estimate comes from a recently completed study by the North Carolina Department of Insurance on the economic impact of the state's captive insurance company program. The impact was generated by premium taxes paid to the state by licensed captive insurers, as well as service provider and hospitality revenues generated by North Carolina businesses for services they provide to the captive insurance industry.

North Carolina's law requires captive insurance companies domiciled in the state to either hold one board of directors meeting in the state, or use at least two North Carolina service providers, such as CPAs, attorneys, or actuaries, thus generating an economic impact in the state.

North Carolina's captive insurance program has grown significantly since the North Carolina General Assembly established the captive insurance program in 2013. The captive program's impact to the state's economy has also increased annually, as shown below.

Economic Impact of North Carolina's Captive Insurance Program

Year

Impact in $MM

2014

2.5

2015

15.3

2016

23

2017

30

Total Impact

70.8

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