Delaware announces record year of captive insurance formations

A report from the state Department of Insurance reveals 74 pure captive insurers, three special purpose captive insurers and 112 series captive insurers were licensed in 2015

Insurance News

By Lyle Adriano

The state of Delaware licensed 74 pure captive insurers, 3 special purpose captive insurers, and 112 series captive insurers—189 captive entities in total—in 2015. The region is considered one of the fastest growing captive domiciles in the world.

Insurance Commissioner Karen Weldin Stewart announced the record figure on Feb. 12, saying that “The growth of Delaware’s captive insurance program reflects the fact that Delaware is a business-friendly environment that applies a firm but fair method of regulation.”

The number of active captive insurers of all types in the state is 1,060, as of Dec. 31, 2015. Broken down, the total consists of 242 pure captive insurers, 740 series captive insurers, 45 special purpose captive insurers, 5 special purpose financial captive insurers, and 3 sponsored captive insurers.

When the captive bureau was first created in July 2009, the state had licensed only 38 captive insurers.

Delaware has issued 1,279 captive insurance company certificates of authority ever since the state licensed the region’s first captive insurance company back in the 1980s.

“I continue to be pleased with the growth of the captive insurance program.  This program continues to provide economic opportunities for my constituents and much-needed revenue for the state,” remarked Stewart.

The state revised its captive insurance laws in 2015 to codify the licensing of series. This led to the creation of the series captive insurance company. Due to the change, the total number of captive insurance companies in Delaware increased.

As far back as 2010, Delaware pioneered licensing series as captive insurers.

 “When I pioneered the use of the series as a captive insurer, I did so with the goal of maximizing flexibility in the use of Delaware business organizations as risk bearing and transfer vehicles.  I am delighted that the captive insurance industry has so readily accepted the series as a captive insurance company,” Stewart detailed.
 

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