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Captive Insurance Company

Other Requirements Necessary to Establish a Captive Insurance or Reinsurance Company in Florida

(Listed in alphabetical order by title)

Additional Incorporation Requirements

These are in addition to the incorporation requirements mentioned in the section "Florida’s Minimum Capitalization and/or Surplus Requirements for a Captive Insurance or Reinsurance Company".

  • A pure captive insurance company or industrial insured captive insurance company incorporated as a stock insurer is required to have its capital divided into shares and held by the stockholders per S. 628.910, F.S.
  • An industrial insured captive insurance company may be incorporated as a mutual insurer without capital stock, the governing body of which is elected by its members.
  • In the case of a captive insurance company formed as a corporation or a nonprofit corporation, before the articles of incorporation are transmitted to the Secretary of State, the incorporators shall file three copies of the articles of incorporation with the Office. If the Office finds they conform to law, it shall endorse its approval on each of the three original copies, retain one copy for its files and return the remaining copies to the incorporators for filing with the Department of State. The articles of incorporation and the organization fees required by the Florida Business Corporation Act or the Florida Not for Profit Corporation Act, as applicable, must be transmitted to the Secretary of State, who must record the articles of incorporation.
  • A captive insurance company may not have fewer than three incorporators of whom not fewer than two must be residents of this state per S. 628.910, F.S.
  • The capital stock of a captive insurance company incorporated as a stock insurer must be issued at par value of not less than $1 or more than $100 per share per S. 628.910, F.S.

Application Process

To apply, an applicant must complete the Captive Insurance Application Form, which also contains general instructions. Visit the Company Admissions page of the Office website for more information about general instructions related to the application package and FAQ's.

Before receiving a license, a captive insurance company formed as a corporation or a nonprofit corporation must file with the Office:

  • A certified copy of its articles of incorporation and bylaws, a statement under oath of its president and secretary showing its financial condition, and any other statements or documents required by the Office.
  • The amount and liquidity of the proposed captive insurance company’s assets relative to the risks to be assumed.
  • The adequacy of the expertise, experience, and character of the person or persons who will manage the company.
  • The overall soundness of the company’s plan of operation.
  • The adequacy of the loss prevention program’s of the company’s parent, member organizations, or industrial insureds, as applicable.
  • Any other factors considered relevant by the Office in ascertaining whether the company will be able to meet its policy obligations.

To evidence competence and trustworthiness of its officers and directors, the application for a license to act as a captive insurance or captive reinsurance company shall include, but is not limited to:

  • Background Investigations
  • Biographical Affidavits
  • Fingerprint Cards for all Officers and Directors – fingerprints must be taken by a law enforcement agency or other entity approved by the Office, be accompanied by the fingerprint processing fee specified in S. 624.501, F.S. and processed in accordance with S. 624.34, F.S.

Approved Providers/Independent Directors:

  • There is no provision in Florida law to maintain an approved vendor list for services of captive managers, actuaries, independent directors, certified public accountants, etc.

Annual Audit/Report:

  • Each year, prior to March 1, a captive insurance or captive reinsurance company is required to submit to the Office a report of its financial condition verified by oath of two of its executive officers and using generally accepted accounting principles, unless the Office approves the use of statutory accounting principles, with useful or necessary modifications or adaptations required or approved or accepted by the Office for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the Office.
  • A captive insurance company may submit a written application for filing the required report, using generally accepted accounting principles, on a fiscal year-end that is consistent with the parent company’s fiscal year. If the fiscal year-end reporting is granted, the annual report is due 60 days after the fiscal year-end.

Asset Management:

  • With respect to captive reinsurance companies only, at least 35% of their assets must be managed by an asset manager domiciled in Florida.

Board Meeting:

  • Required to hold at least one board of directors’ meeting each year in Florida.

Coverage:

  • A captive insurance company may apply to offer all insurance authorized in Florida, except for workers’ compensation and employer’s liability, life, health insurance, personal motor vehicle insurance, and personal residential property insurance.
  • A captive reinsurance company may apply to offer reinsurance covering property and casualty insurance or reinsurance contracts.

Fees:

  • Initial License Application Fee (non-refundable) - $1,500
  • Annual Renewal Fee - $1,000

Investment Restrictions:

Principal Place of Business:

  • Required to maintain its principal place of business in Florida.

Requirements for resident registered agent to accept service:

  • A captive insurance company must appoint a resident registered agent to accept service of process and to otherwise act on its behalf in Florida.
  • If a captive insurance company is formed as a corporation or a nonprofit corporation and if the registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the Chief Financial Officer of this state must be an agent of the captive insurance company upon whom any process, notice, or demand may be served.

Reserve Requirements:

  • Captive Insurance Company:
    • May take credit for reserves on risks or portions of risks ceded to authorized insurers or reinsurers and unauthorized insurers or reinsurers complying with S. 624.610, F.S.
    • May not take credit for reserves on risks or portions of risks ceded to an unauthorized insurer or reinsurer if the insurer or reinsurer is not in compliance with S. 624.610, F.S.
  • Captive Reinsurance Company:
    • Required to file an annual actuarial opinion on loss and loss adjustment expense reserves provided by an independent actuary. The actuary may not be an employee of the captive reinsurance company or its affiliates.
    • May discount its loss and loss adjustment expense reserves at treasury rates applied to the applicable payments projected through the use of the expected payment pattern associated with the reserves per S. 628.912, F.S.

Residency Requirements:

  • At least one member of the Board of Directors must be a resident of Florida.
  • At least two incorporators must be a resident of Florida.

Taxation Requirements:

  • See Chapter 624, Part IV, F.S., with respect to fees, taxes and funds.
  • Premium Tax – in accordance with S. 624.509, F.S., an amount equal to 1.75% of the gross amount of such receipts; with provisions for allowable credits under subsection (4) and (5).

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