Captive Insurance News

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

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

A FREE 12-page special report from

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.

Show Me My Free Report

The Current State of North Carolina's Captive Insurance Program

North Carolina Piggy Bank 600x300
August 29, 2018

At the opening general session of the 2018 North Carolina Captive Insurance Association's (NCCIA) annual conference, North Carolina's Department of Insurance (NCDOI) Senior Deputy Commissioner (Captive Insurance Companies Division) Debbie Walker spoke about the state captive insurance sector's swift 5-year ascent to one of the world's fastest growing captive domiciles.

The graphs below, reproduced with the permission of the NCDOI and the NCCIA, provide a total view of the domicile's rapid increase in captive insurer formations based on the total count of licensed stand-alone captive insurance companies (254) and approved protected cells and series captive insurance entities (452). The 2018 data is through July 31, 2018.
Licensed Stand-alone

Tom Adams, president and CEO of the NCCIA, said that North Carolina's "[captive] growth has been pretty spectacular across the captive spectrum. When you look at our state's corporate makeup, we have a sea of midsized businesses for which micro-captives are a wonderful alternative, while at the same time, enough large business has resulted in pure captive growth as well. Further, even though we are the 9th largest state by population, over 50 percent of our gross domestic product comes from agriculture, yet another fertile ground for captives."

Mr. Adams continued, "In 2017, we had a number of captive insurer redomestications where large captives took advantage of North Carolina's favorable regulatory climate and our weather."

The Act

In October of 2013, the state's captive insurance act (the Act) went into effect with subsequent annual legislative amendments.

The Act contains the following unique elements according to Ms. Walker.

The Act

Furthermore, Ms. Walker said that North Carolina's captive laws enable all types of captive insurance structures, which include pure, protected cell, special purpose, industrial insured, branch, association, and special purpose financial captive insurers, as well as risk retention groups.

The special purpose captive insurance company definition provides for the formation of captive insurers not otherwise defined by the Act and subject to the commissioner's review such as agency captive insurers, series limited liability company structures (if formed in another state), and group captive insurers.

Some of the Act's other significant features were also shared by Ms. Walker as follows.

Significant Features

Economic Impact

Seventeen individuals, including NCDOI Commissioner Mike Causey, support the state's captive regulatory function and have earned a reputation for responsive and prompt support services as well as providing appropriate regulation.

Session attendee Dan Towle, president of the Captive Insurance Companies Association, remarked that he is "impressed with both the domicile's rapid growth and the North Carolina Department of Insurance commitment to a captive-friendly approach."

According to Ms. Walker, the state's captive program has had a total economic impact of $71 million to North Carolina's economy. The components of this number are delineated in the graphic below (reproduced with permission from the NCDOI and the NCCIA).
estimated impact

The Department

Committed Competitive

A Banner Year

Ms. Walker emphasized the following key numbers from North Carolina's 2017 results, making it the number one captive domicile in the world in terms of new captive insurance companies licensed (graphic reproduced with permission from the NCDOI and the NCCIA).
2017 results

Ms. Walker said that since 2013, 63 captive insurance companies redomesticated to North Carolina. Of these redomestications, 22 percent came from US domiciles and 78 percent from non-US domiciles.

Also presented was the following breakout of stand-alone licensed captive insurers based on captive type as well as the total number of licensed captive insurers by year and approved protected cells and series by year. The data is through July 31, 2018 (graphics reproduced with permission from the NCDOI and the NCCIA).

Captive Insurers

Total captive insurers

Total Protected Cells

Ms. Walker also presented North Carolina's captive insured distribution by industry as shown below (graphic reproduced with permission from the NCDOI and the NCCIA).

Insureds by Industry


"One of the trends North Carolina expects to see is the continued formation and use of captives by smaller to medium sized businesses," said Ms. Walker. She explained that the captive domicile has also seen some trending toward captive owners incorporating their cells instead of using protected cell structures. She said that the migration to incorporated cells has to do with the fact that captive owners and captive managers like having the "walling off" that the legal entity provides.

Ms. Walker also mentioned that the state is seeing growth in both medical stop-loss programs as well as producer-owned captive insurers.

Some graphics provided in this article are reproduced with the permission of the NCCIA and the NCDOI.

Captive Insurance Company Reports
Follow on Twitter

Twitter Feed