Keeping Up with Captives
Keeping Up with Captives
Several states added new captive insurance companies last year, according to Captive Insurance Times.
Arizona licensed eight new captive insurance companies (down from 11 last year), and the state also saw a rise in captive closures year-on-year, with five captives closing last year, up from three in 2017.
As of the end of December, 2018, Arizona counted 124 active captives, including 82 pure captives, 21 pure reinsurers, 11 risk retention groups, five industry groups, two association captives, two protected cell captives and one agency captive.
Vince Gosz, chief captive analyst at the state’s Department of Insurance, told Captive Insurance Times that “So far, 2019 looks to be another active year with several serious inquiries and pre-application discussions early in the new year, though we may also see a little attrition as some captive programs run their course. Overall, we’re seeing plenty of activity in the captive space and expect it to continue.”
The District of Columbia (DC) licensed 17 new captive insurance companies last year, the largest growth in terms of captive formations since 2015, reports Captive Insurance Times. In 2017, DC licensed only three captives, making this growth remarkable.
As of the end of December, 2018, DC licensed 154 active captives, including 39 pure captives, 21 pure captive cells, 37 risk retention groups (RRG), 12 rental captives and 23 rental captive cells, 11 association captives and two association captive cells, three agency captives and three agency captive cells, and three branch captives.
“The majority of new formations were protected cell companies (PCCs) or cells, which continues a trend over the last four to five years,” notes Sean O’Donnell, director of financial examination–risk finance bureau, DC Department of Insurance, Securities and Banking.
O’Donnell revealed that only one RRG was licensed last year, which was a decline in formations for the structures, but that redomestications had risen in 2018, a trend that the department expected to see continue.
The last state we’d like to report on is Kentucky, which licensed seven new captive insurance companies last year, representing an increase on the four new captives the state licensed in 2017. A net reduction of one captive last year means at year-end 2018 there were 64 licensed and active captives in the Bluegrass State. All new formations were pure captives, (53 pure captives, eight group/association captives, and three risk retention groups).