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Florida becomes newest state to allow formation of captive insurance companies

Posted On: Apr. 25, 2012 12:00 AM CST

Florida becomes newest state to allow formation of captive insurance companies

TALLAHASSEEā€”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.