New Legislation Aims To Increase North Carolina Captive Insurers
March 05, 2019
Captive insurance companies that redomesticate to North Carolina would be exempt from state premium taxes under recently introduced legislation.
Under the measure, H.B. 220, introduced February 27 in the state's House of Representatives, captives licensed in another domicile and redomesticate to North Carolina prior to January 1, 2021, would be exempt from prorated premium taxes for the year the redomestication occurs as well as for premiums taxes for the following year.
The exemption would expire on January 1, 2022.
The premium tax exemption legislation is strongly backed by both state insurance regulators and North Carolina's captive insurance company trade association.
"This provision is yet another benefit for captive insurance companies to redomesticate in North Carolina versus other jurisdictions onshore or offshore," North Carolina Insurance Commissioner Mike Causey said in a statement.
"Our members are excited about the potential for additional growth of the number of captives in the domicile, particularly as more companies see the significant benefit of these changes," North Carolina Captive Insurance Association President Thomas Adams said in a statement.
If approved, the legislation would be the third change to the captive statute that lawmakers have made in less than a year. In June 2018, North Carolina legislators gave final approval to legislation making it clear that captives licensed in other states are exempt from North Carolina taxes, such as premium taxes, even if they do business in North Carolina.
A provision in another measure, also approved in June 2018, specifies that any change a captive makes to its executive officers or directors will be automatically approved by the state insurance commissioner unless it is disapproved within 30 days after completion of the commissioner's review of the individuals' biographical affidavits.
North Carolina is one of the largest domestic captive domiciles. Final statistics are not yet available, but state regulators currently estimate that North Carolina had at least 244 captives licensed as of December 31, 2018.
March 05, 2019