New Jersey issued a certificate of authority, effective July 1, to its first captive insurance company, according to state insurance regulators.
Tom Considine
New Jersey’s new captive insurance law, modeled after Vermont’s, took effect in May.
Prudential Insurance Co. of America, based in Newark, N.J., is the first company to start a captive insurance company, Prudential New Jersey Captive Insurance Co. (NJCAP), in the state under a law Gov. Chris Christie signed in February.
NJCAP will manage Prudential’s risk in a portion of its life insurance and annuity policies, according to the New Jersey Department of Banking and Insurance (DOBI).
The captive insurance company will maintain a capital level above the $250,000 required by the state.
New Jersey-based captive insurance companies will be regulated by DOBI and taxed by the state at rates ranging from 0.024% to 0.38% of annual premiums, with a minimum tax of $7,500 and maximum of $200,000.
“New Jersey’s captive law is one additional way that the Garden State is growing more business opportunities and improving the economy during the Christie Administration,” said New Jersey Insurance Commissioner Tom Considine in a statement. “We welcome Prudential’s new captive insurance company as the first captive in New Jersey and expect many more firms to form new captives or to relocate existing ones here.”
The captive insurance law allows captive insurers to do business in the lines of life insurance, health insurance, annuities, indemnity, property and casualty, fidelity, guaranty and title insurance, and reinsurance. The legislation is intended to encourage the growth of an industry that in some states has brought in billions of investment and new high paying jobs, according to DOBI.
Captive insurance companies are insurance companies established with the specific objective of financing risks emanating from their parent group or groups.
New Jersey is now one of 26 states and Washington, D.C., that permit captive insurers.
New Jersey’s first captive insurer up and running via IFAwebnews.com .
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