North Carolina Lawmakers Do Not Renew Action on Captive Legislation
November 21, 2019
North Carolina legislators have ended the 2019 session without taking renewed action, as some had hoped, on legislation that would temporarily exempt captive insurance companies from the state's premium taxes.
Under that provision, captives licensed in another domicile that redomesticate to North Carolina prior to January 21, 2021, would be exempt from prorated taxes for the year the redomestication occurs as well as for premium taxes for the next year.
The exemption would expire on January 1, 2022.
The provision had been part of a broader bill, H.B. 220. But, earlier this year, lawmakers stripped the premium tax exemption provision. That action, state captive executives said at the time, was due to legislators' recognition that they did not have enough time to consider the proposal, not because of opposition to the measure.
There was some hope, though, that lawmakers might take up the premium tax provision later this year, but that did not happen.
Whether lawmakers will take up the proposal next year is not clear because the 2020 session is an abbreviated one.
"Whether legislation important to the captive insurance industry can be considered early next year depends on what the leadership determines," said Tom Adams, president and CEO of the North Carolina Captive Insurance Association in Southern Pines, North Carolina.
North Carolina has been one of the fastest-growing U.S. domiciles. At the end of 2018, North Carolina had 244 captives, up from just 52 in 2014. Captive premium volume growth also has been significant. Last year, North Carolina captives generated $920.8 million in gross written premiums, which is seven times greater than the $130.1 million in premium volume in 2014.
November 21, 2019