The North Carolina Captive Insurance Association held its annual meeting in Durham from August 30 through September 1. Attendance, which consisted of approximately 200 people, was comprised of captive owners, service providers and the North Carolina Insurance Department of Insurance (NCDOI) Captive Insurance Team. NCDOI Commissioner Mike Causey also attended and spoke briefly at the Annual Commissioner’s Luncheon about the success of the state’s captive program and future legislative initiatives. Other topics of discussion were presented, including updates on Accounting and Auditing; Medical Stop Loss Captives; Legal and Regulatory Updates; and Advocacy Issues. Other highlights included:
- Investment discussion highlighting the current historically low bond interest rate environment and volatile equity markets along with a glimpse into the future.
- A panel of speakers that included an FBI Special Agent discussed continued the cyber risk that plagues every industry, costing significant upheaval in organizations around the world. Captive insurers had been viewed as a great solution to provide cyber insurance, though the commercial market has seen more competition in recent years.
- An update on Federal tax developments, IRS rulings and recent Captive Cases concluded the conference.
Another focus of the conference was the favorable advantages and benefits of licensing a captive in North Carolina, particularly from a cost and operating standpoint. Also, the Department highlighted the process of re-domesticating a captive to North Carolina, emphasizing how easy the process is as well some tax incentives for doing so. Since the state’s entry into the captive market in 2013, growth has been consistent. Currently there are approximately 250 licensed captives — most of which are pure captives.
Despite being a late entrant to the Captive arena, North Carolina has dedicated significant resources to building its program and now ranks as the 4th largest domicile in the U.S. The state is recognized as one of the best business climates in the U.S., and there are numerous reasons to make North Carolina the domicile for a captive insurance company. In general, North Carolina has lower capital requirements, taxes and fees among U.S. domiciles and its regulation is primarily under the oversight of its in-house experts of analysts, actuaries and examiners.
Faegre Drinker attorneys and consultants will be attending the D.C. Captive Conference on October 18-19 and will provide updates on that key jurisdiction.