New Law Helps Florida Attract U.S. Domiciled Captive Insurers
– The Office of Insurance Regulation (Office) today announced that Florida now has better opportunities to attract U.S. domiciled captive insurers thanks to Governor Scott’s recent signing of House Bill 1101
. Under current law, the Legislature had already created provisions authorizing the creation of U.S. domiciled captive insurers by establishing operational criteria and standards. House Bill 1101 augments these provisions by further specifying criteria for the formation, incorporation, coverage, capital and surplus, reporting, licensure and reinsurance of captive insurers.
"We welcome captive insurers to Florida's insurance marketplace. The new law will encourage the formation of new captive insurers, which will promote increased investment in our insurance marketplace. I thank Governor Scott for signing this bill and the Florida Legislature for passing this important piece of legislation," said Kevin McCarty, Florida’s Insurance Commissioner.
A captive insurer is an insurance company formed to provide specific classes of insurance coverage to its parent organization or its affiliates, but not to the public as a whole. The jurisdiction under which the captive is organized is called the "domicile" and the captive is regulated by the laws of that domicile (Florida in this example).
House Bill 1101 provides stipulations for the creation of pure captives, industrial insured captives, special purpose captives and captive reinsurance companies. It permits captive insurance companies to provide all insurance under the Florida Insurance Code, except for workers’ compensation and employer’s liability, life, health, personal motor vehicle, and personal residential property insurance. Under the law, captives must pay an annual fee of $1,000, obtain a Florida insurance license, hold one board meeting a year and maintain its principal place of business in this state. There are also financial and other business requirements to ensure adequate reserves and solvency.