Following are some updates on the regulation of captive insuers by New Jersey and Nevada.
New Jersey
On October 25, 2010, the New Jersey Assembly passed unanimously A2360, which creates a regulatory and licensing scheme for captive insurers in the state. This bill, as amended, is identical to SB168. It provides, among other things, that a captive insurer must meet certain requirements, including those relating to formation, capital and surplus, examination, local office presence, ability to meet policy obligations, payment of certain fees and taxes, and annual reporting.
Following passage of A2360 by the New Jersey Assembly, the bill was referred to the New Jersey Senate Commerce Committee and Senate Budget and Appropriations Committee. On December 6, 2010, the Senate Commerce Committee reported favorably on the legislation, with amendments (bill text and committee report). The amendments to the bill: (1) clarify that, in addition to an insured or affiliate of a captive insurance company, a claimant thereof shall not receive a benefit from a plan, pool, association, or guaranty or insolvency fund; and (2) eliminate the transfer of 10% of the premium tax revenues collected under the bill to the commissioner for the regulation of the captive insurance companies. A2360 was also reported favorably out of the Senate Budget and Appropriations Committee (committee report) two days after the Senate Commerce Committee’s December 6th report. The legislation remains pending in the New Jersey Senate.
Nevada
On December 15, 2010, SB46 (bill text) was prefiled in the Nevada Senate. The bill allocates a portion of revenue from the premium tax on captive insurance to the Commission on Economic Development for promotion of the captive insurance industry in Nevada. The bill was referred to the Committee on Revenue.
This post written by Karen Benson.