New Jersey's captive bill was passed on a day when several economic development bills under the theme of "Back to Work NJ" were also moved forward, NJCIA said. The bills are focused on jumpstarting the New Jersey economy and creating a friendlier business climate in the state.

"We have been in touch with the governor's office and expect him to sign it into law this month," said Gregg Sgambati, president of the NJCIA, in a statement. "The Department of Banking and Insurance is behind this legislation and is looking forward to starting up the new industry."

Mr. Sgambati told NU Online News Service in an e-mail that the bill regulates captive insurance companies–which include pure captives, association captives, sponsored captives and industrial insured captives.

"We do not have any data on which to base a prediction of the size of companies; however, my guess is that larger captives will form, from an intuitive look at the business demographics in the region," he said.

Mr. Sgambati said that New Jersey's location in the heart of the nation's financial corridor (Boston to Washington, DC) makes it geographically convenient to many large firms. Whereas previously, parent companies may have elected to set up their captive insurance companies in jurisdictions that had prominent tourism industries, today companies prefer a geographically convenient domicile, he said.