NU Senior Editor Caroline McDonald writes:
The U.S. captive field is getting more and more competitive, with additional domestic domiciles sprouting up and long-time havens updating their regulations to keep pace, making the choice of where to set up shop more difficult for risk managers. But if its possible for a captive domicile to have all the necessary pieces in place for success, Delaware promises to come as close as any. Although several domiciles are nearly ideal, a new and improved Delaware just might give them a run for the money.
The necessary ingredients include:
–Flexible, updated legislation.
–A convenient geographic location.
–An insurance regulator on board, determined to see the captive program succeed.
–A healthy number of ancillary support organizations.
–Buy-in by the state legislature, without which necessary captive legislation can languish and a quick way for a domicile to lose its edge.
Delaware has had captive statutes on the books for 20 years, but recently revamped its laws. Updated legislation was introduced in early June and was passed by the end of the month, fulfilling two of the requirements for a top-notch domicile–updated regulations and speed.
Like South Carolina–whose captive program was catapulted by Ernst Csiszar, then the states insurance commissioner–Delaware Insurance Commissioner Matt Denn is the force behind the captive program. Mr. Denn and Delaware Gov. Ruth Ann Minner were both on hand to welcome about 120 attendees at the Delaware Captive Insurance Associations first annual meeting in Wilmington last week.
Mr. Denn recounted working together with members of the business community to outline the functions and needs of a captive program in the state. He worked with the state legislature to get the captive law updated and initiated a search for the final piece of the puzzle–the regulator.
After a year of searching, and numerous phone calls, Mr. Denn said, William P. White was hired for the job. He began working for the department on Aug. 1.
Mr. White–former director of Washington, D.C.s captive program–has an underwriting background with reinsurers General Re and Munich Re, and before that, primary insurers INA and Royal-Globe Insurance.
Mr. White told National Underwriter that the size of a company looking to form a captive in Delaware wont be the major consideration, but rather market needperiod.
He said that, I dont care whether theyre big, theyre small. I meant what I said about trying to work with folks to get this done.
Part of a regulators job, he explained, is making things happen the right way. Then you dont spend so much time trying to correct it when it goes wrong. He encouraged anyone with a vision for their captive program to tell us why you want to do it and what kind of outcomes you expect from it.
Do you folks have any captive stories to share? Where do you prefer to place your captive business and why?
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