District of Columbia
The District of Columbia is one of the foremost US domiciles with a very responsive and flexible regulatory regime under the DC Department of Insurance, Securities and Banking. The original captive law was passed in 2000 and has been enhanced by the Captive Insurance Company Act of 2004.
The Captive Act is concise and well thought out, and provides flexibility not found in other “onshore” captive laws – such as the ability to form rent-a-captives, agency captives, protected cell captives and incorporated cells. Re-domestication provisions from any other domicile are relatively transparent and DC also allows for reinsurance credits to non US insurance companies (subject to Regulatory approval). DC also allows for “best practice” provision that allows for automatic adoption of any ideas, principles and legislative amendments enacted by any other domicile – either onshore or offshore.
The main regulatory features include:
- Insurers must be licensed and must appoint a resident insurance manager
- Minimum of two directors
- Protected Cell Company with Incorporated Cell provisions
- Flexibility on allowable assets as set out in Captive Act
- Annual audit of all insurers (auditors must be approved in advance)
- Annual actuarial valuation of all captives (actuaries must be approved in advance)
- Premium tax capped at $100,000 (minimum $7,500)
- The captive MUST hold its annual meeting in DC
Capital and Surplus Requirements
|Type of License
|Association captive - stock
|Association captive - mutual
||On a case by case basis
The minimum surplus must be in the form of cash or letter of credits.
Insurance license application fee is US$500. Incorporation fees vary, but US$5,000 is a reasonable estimate. The annual license fee is US$300.
When applying for an insurance license, the applicant company must provide a detailed business plan accompanied by 5 year financial projections. Applications will be reviewed within 30 days. The captive must retain a qualified manager, attorney, accountant and actuary.