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Florida becomes newest state to allow formation of captive insurance companies

Florida becomes newest state to allow formation of captive insurance companies

TALLAHASSEE—Florida Gov. Rick Scott on Tuesday signed into law a measure allowing the formation of captive insurance companies in the state.

The measure, H.B. 1101, allows the formation of single-parent captives, special-purpose captives, industrial insurance captives and captive reinsurance companies.

Captives licensed in Florida will be required to hold at least one annual board meeting in the state and appoint a registered resident agent to act on their behalf in Florida. Captives and captive reinsurance companies must pay a $1,500 application fee and a $1,000 annual renewal fee.

The new law sets minimum paid-in capital requirements of $100,000 for pure captives and $200,000 for industrial insured captives, with minimum capital for special-purpose captives determined based on the company's business plan. Pure captives are required to have minimum surplus of $150,000 while industrial insureds incorporated as stock companies are required to have $300,000 in minimum surplus and industrial insured captives incorporated as mutual insurers are required to have at least $500,000 in surplus.

Captive reinsurance companies are required to have a minimum of the greater of $300 million or 10% of reserves in capital and surplus.

The new Florida captive law takes effect July 1.

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