New Jersey continues the effort to make the state a friendlier and more cost effective place to do business. Recognizing the skyrocketing costs of insurance and difficulties of some businesses to find insurance coverage that satisfies the unique needs of their industry, the state now allows for the formation of Captive Insurance Companies.
- Captive Insurers ActOn February 21, 2011 New Jersey enacted the Captive Insurers Act (P.L. 2011, c. 25 (NJSA 17:47B-1 et sep.)) which authorizes the establishment of new captive insurance companies and the redomestication of captive insurance companies in New Jersey. The Act, which went into effective on May 22, 2011, will give New Jersey businesses more control of the organization’s risk management costs and insurance coverage by allowing companies to “insure themselves” through these special purpose companies.
- What is a Captive Insurance Company?A captive insurance company is an insurance company established with the specific objective to cover the assets and risk of the parent group or groups. This “in-house” insurance company allows the parent to; have better control of premiums, to tailor coverage to the specific needs of the parent, to have direct access to the reinsurance market, and to have greater control in risk management and claims activities.
- How do I establish a Captive Insurance Company?The New Jersey Department of Banking and Insurance (DOBI) has established a set of best practices for forming a captive in New Jersey and for redomesticating a company in New Jersey.
- You can review general information concerning captive insurance companies by visiting the DOBI’s Captive Corner
- To review the best practices for establishing a New Jersey Captive visit Forming a Captive In New Jersey
- To review the best practices for redomesticating a captive insurance company visit Redomesticating a Captive Insurance Company
- Registered Service ProvidersThere are opportunities for those properly registered with DOBI wishing to provide professional services to captive insurers including; Actuaries/actuarial Firms, Captive Managers and Certified Public Accountants. Those wishing to provide professional services to captives can visit Register Service Providers for more information
- For more information or to ask questions about Captive Insurance Companies