SPECIAL FOCUS: Captive wars – PART ONE
This week we present a two-part posting on changes regarding captive insurer regulation. The competition is on among the states for hosting captives. The competition consists of simpler regulation and lower capital requirements. On May 10, the Governor of Montana was presented with a new captive bill for signature which reduces capital requirements for protected cell captives 50%, from $1 million to $500,000, with a captial requirement of $250,000 for protected cell captives with 10 or fewer homogenous cells. The capital requirement for captives that reinsure admitted insurers issuing policies is also to be reduced by 50%. Other regulatory simplification is included in the bill. An article about this bill appears in the May 21 issue of Business Insurance. Meanwhile, the Arizona Governor recently signed a new bill which lowers the capital requirements for Arizona-domiciled protected cell captive insurers from $1 million to $500,000, and makes many changes to simplify regulation and reduce the burdens of regulation. A summary of the Arizona bill is also available.
