North Carolina governor approves state's first captive law
Reprints
North Carolina Gov. Pat McCrory has signed a bill into law allowing the formation of captive insurance companies in the state.
The North Carolina captive law, which allows captive insurers in the state for the first time, permits the formation of all types of captives, including special-purpose financial captives formed to facilitate risk securitizations.
Minimum capital and surplus requirements are set at $250,000 for pure captives and protected cell captives; $500,000 for association captives and industrial insured captives; and $1 million for risk retention groups. The minimum capital requirement is set at $250,000 for special-purpose financial captives.
The North Carolina law sets a premium tax of 0.4% on direct premiums up to $20 million and 0.3% on direct premiums greater than $20 million.
The tax on reinsurance premiums is 0.225% up to $20 million; 0.15% for $20 million to $40 million in reinsurance premiums; 0.05% on reinsurance premiums from $40 million to $60 million; and 0.025% on reinsurance premiums of $60 million or more.
The new law goes into effect July 1.
