North Carolina Captive Insurance Act (HB 473) - Summary

• Establishes the North Carolina Captive Insurance Act by creating Part 9 of Article 10 of Chapter 58 of the General Statutes to regulate captive insurance companies, including pure captive, association captive, industrial insured captive, risk retention groups, protected cell captive, incorporated cell captive, and special purpose financial captive insurance companies.

• Sets minimum capital and surplus requirements ranging from $250,000 for pure captive and protected cell captive companies to $1,000,000 for risk retention groups, with Commissioner discretion to require additional capital based on business type and volume.

• Establishes protected cell captive insurance companies that can segregate assets and liabilities into separate protected cells to facilitate multiple participants and insurance securitizations with reduced formation and administrative expenses.

• Creates special purpose financial captive (SPFC) insurance companies limited to securitization transactions and reinsurance of insurance risks, with capital requirements of $250,000 and provisions for issuing securities and protected cell arrangements.

• Imposes a premium tax on captive insurance companies ranging from 0.025% to 0.4% depending on premium volume and type, with minimum and maximum aggregate tax limits, and exempts captive companies from franchise taxes, income taxes, and insurance regulatory charges.