North Carolina continues to experience growth in its captive insurance industry as it enters its sixth year and has emerged as one of the nation’s leading captive insurance domiciles, according to a statement from North Carolina Insurance Commissioner Mike Causey.
Captive insurance is a formalized form of self-insurance through which a business may form its own insurance company to insure its risks. Potential benefits of captive insurance include reduced insurance costs, stabilized pricing, customization of policy terms and conditions to meet the needs of business, and the ability to obtain coverage that is not readily available or too costly in the commercial market.
North Carolina’s captive insurance program was established in 2013 when the N.C. General Assembly approved the North Carolina Captive Insurance Act. Since then, NCDOI has licensed 293 captive insurers and approved 531 cells and series. Currently, 688 risk-bearing captive insurance entities are regulated by NCDOI, including 244 active captive insurers and 444 active cells or series.
The 244 captive insurers are comprised of the following:
- Pure captive insurers: 185
- Protected cell captive insurers: 29
- Risk Retention Groups: 10
- Special purpose captive insurers: 20
Since its inception, the program has experienced annual growth in the number of captive insurers licensed in the state, NCDOI said.
As in prior years, the growth in 2018 is attributed to both new insurer formations and the transfer of other captive insurers to North Carolina from other U.S. and off-shore domiciles. The insurers are primarily writing property and casualty lines of business, but the formation of medical stop- loss captive insurers also continues.
The results of the 2018 NCDOI captive insurance economic impact study is anticipated to be released in May 2019. The purpose of this study is to determine the favorable financial impact of the captive industry on the state’s economy.
Source: North Carolina Department of Insurance
Topics Carriers North Carolina
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