Delaware’s Governor Carney has signed in new legislation enabling the state’s captive insurance division greater flexibility in its offerings to captive insurance companies.
The bill is the result of a multi-year effort from senator Trey Paradee and representative Bill Bush after legislative proposal proceedings were stalled due to the Covid-19 pandemic.
With the signing in of Senate Substitute 1 for Senate Bill 36, Delaware captives can be classified as registered series. The bill also offers clarity regarding provisions around insuring a parent company.
Perhaps most notably, a Delaware captive can now enter dormancy after 12 consecutive months of inactivity instead of requiring a calendar year of inactivity.
“The DCIA thanks Governor Carney, the sponsors of the bill, and Insurance Commissioner Navarro for their support of the captive insurance industry,” said Joanne Shaver, president of the Delaware Captive Insurance Association (DCIA). “The DCIA believes these changes are beneficial to captive owners, especially with respect to Delaware’s dormancy statute. The change to a continuous 12-month period allows a captive to enter dormancy status sooner than it would have been able to previously. This change will make it more favourable for captive owners to elect dormancy status over dissolution of the captive, especially when the owner isn’t 100% sure they want to dissolve their captive immediately.”
Delaware is the world’s fifth largest captive domicile and the third largest in the United States. The state reported licensure of 70 new captives in 2020, bringing its total to 783 active captives with $5.4bn in gross written premiums.