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Utah Insurance Department
Captive Division overview – January 2012
Utah Insurance Department Captive Division overview January 2012 - - PowerPoint PPT Presentation
Utah Insurance Department Captive Division overview January 2012 - - PowerPoint PPT Presentation
Utah Insurance Department Captive Division overview January 2012 Utah! The New Frontier for Captives What is a Captive Insurance Company? A captive insurance company is a licensed and regulated insurance or reinsurance company. Its
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A captive insurance company is a licensed and regulated insurance or reinsurance company. Its business is controlled by its owners, which are the principal insureds.
What is a Captive Insurance Company?
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Captives by parent industry
10 20 30 40 50 Healthcare Real estate Manufacturing Construction Financial Professional Retail Transportation Energy
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Why Form a Captive Insurance Company?
Control insurance cost Obtain customized
coverage
Focus on risk and claim
management
Permit access to
reinsurance
Commercial market not
meeting needs
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Popular Lines of Business
General Liability Professional Liability Workers’
Compensation (Deductible)
Environmental
Impairment
Business Interruption Warranty D&O
- E&O
- Pollution Liability
- Medical Stop Loss
- Flood/Earthquake
- Marine
- Employment
Benefits
- Life
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Examples of Traditional Lines of Captive Insurance
General Liability Professional and Products Liability Director and Officer Liability (D&O) Employment Practices Liability Environmental Liability Product or Service Extended Warranty Property and Business Interruption Workers’ Compensation (pursuant to 31A-37-202, a captive may
apply to do all insurance authorized by this title except workers’ compensation, personal motor vehicle, and homeowner’s coverage)
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Expanded Captive Lines
Employee Benefits (ERISA) Terrorism Risk Construction Exposures Cyber Risk Shipping Coverage Title and Private Mortgage
Insurance
Trade Credit Risk
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Emerging Captive Lines
Intellectual Property – patent,
trademark, etc.
Product Recall Expert Witness Testimony
Coverage
Supply Chain Disruption International Kidnapping
Protection
Loss of Key Customer /
Supplier
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Captive Regulations
Captive Insurance Companies Act passed in 2003 as an
economic development initiative (31A-37)
Special Purpose Financial Captive Insurance Company Act
enacted in 2008 (31A-37a)
Captive Insurance Companies rule enacted August, 2008
(R590-238)
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Number of captives formed by year
10 20 30 40 50 60 70 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 1 13 16 63 32 33 54 70
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Number of active captives by year
50 100 150 200 250 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2 15 30 93 123 148 188 241
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Types of captive structures authorized
Pure Association Industrial (risk retention group) Sponsored cell Special purpose Reciprocal
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Capital and surplus requirements
Type of captive Minimum C&S
Pure Association Industrial (RRG) Sponsored cell Special purpose Reciprocal $250,000 $750,000 $500,000 $1,000,000 (calculated) $1,000,000
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Local office requirements
Hold at least one annual board of directors meeting in
Utah
Maintain principal place of business in Utah (books and
records)
Appoint local registered agent At least one member of board of directors is a resident
- f Utah
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Reporting requirements
Annual financial statement
Pure captives:
Utah-specific format
Others:
NAIC annual statement blank
Annual audit report Statement of actuarial opinion Others as required by commissioner (quarterly, RBC)
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Taxes and fees
Application
Application:
$200
Initial license:
$5,000
E-Commerce:
$250
Annual renewal:
$5,250
Property tax, if appropriate No premium tax No state income tax
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Ross Elliott, FLMI Captive Insurance Director Phone: 801-537-9047 Fax: 801-538-3829 rcelliott@utah.gov Utah Insurance Department State Office Building, Room 3110 Salt Lake City, UT 84114-6901
www.captive.utah.gov