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News Release

New Jersey Department of
Banking and Insurance


Acting Commissioner Ken Kobylowski

For Immediate Release:
September 19, 2012

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

New Jersey's First Captive Insurance Summit Highlights Growing Captive Market

SOMERSET, NJ – New Jersey Department of Banking and Insurance Acting Commissioner Ken Kobylowski told a group of  approximately 85 business leaders last week at the Department’s first Captive Insurance Summit that the Christie Administration’s economic development policies have made New Jersey a great environment in which to form or redomesticate captive insurance companies. 

“Thanks to the leadership of Governor Chris Christie, we have a new and growing captive insurance market,” Acting Commissioner Kobylowski said. “These captive companies in New Jersey were those formed by a diverse group of businesses such as communications, healthcare and life insurance as well as a company that redomesticated from New York.”

The Department hosted the Summit to familiarize companies planning to form captives with the State’s regulations and application process and to bring together experts in the captives industry to discuss emerging trends and issues.

In February 2011, Governor Christie signed the Captive Insurance Law, P.L.2011, c.25 which allows for the formation of captive insurance companies in New Jersey. Captive insurance companies are insurance companies established with the specific objective of financing risks emanating from their parent group or groups.

Since the law took effect, the Department has approved the formation of four captive insurance companies, and there are currently eight other potential captive insurance company formations in the various stages of approval in New Jersey. “Just two years ago, this Department could not approve a captive insurance company,” said Acting Insurance Director Peter L. Hartt in delivering the opening remarks for the event. “Now companies are lining up at our door to do exactly that and that is why we are here today.”
                  
The summit consisted of two panels. “Captives in the Garden State: The New Jersey Experience,” focused on the State’s application and formation process,  reviewing the captive structures that fit the needs of an interested party, redomestications, and choosing service providers.

Panelist Richard W. Wright, senior vice president with Willis Captive Consulting Service said companies are changing the way they decide where to locate captives.

 “Businesses deciding where to locate their captives used to make their decision this way: Do you want to ski? Then you go to Vermont. Do you want to play golf? Then go to Bermuda. Do you want to scuba dive? Then choose the Cayman Islands. It’s not done that way any more,” he said. “Today we look at taxes, regulations, infrastructure and the perception of the state, and New Jersey is strong in all aspects.” he said.

The second panel, “Emerging Captive Trends and Issues,” focused on trends and issues affecting captive insurers today, such as:employee benefits, international events, the Nonadmitted and Reinsurance Reform Act (NRRA) and state self-procurement tax, and cyber risk coverage. Panelist Arthur G. Koritzinsky, managing director, Captives Solutions Group, Marsh, said the current regulatory environment is very favorable for the many New Jersey companies with captives located elsewhere to redomesticate to the Garden State. “There is going to be a lot of redomestication back to New Jersey over time,” he said.

In concluding the event, Acting Commissioner Kobylowski told the audience: “If you are looking to form or redomesticate a captive in New Jersey you have a friend in Trenton….  I hope that we made the case today that New Jersey is a great place to grow your captive. The New Jersey Department of Banking and Insurance stands ready to assist you in any way possible.”

Pictured above (from left) – Crosby Sherman, the Department’s Chief of Captive Insurance; Paul Johnson, Director, Captive Operations, Verizon Communications Inc., and President of Exchange Indemnity Company, New Jersey; Acting Commissioner Ken Kobylowski; Arthur Koritzinsky, managing director, Captive Solutions Group, Marsh; and P. Bruce Wright, partner, Sutherland, Asbill & Brennan LLP.
Captive

Pictured above (from left) – Harry Baumgartner, partner, Bressler, Amery and Ross; Mark Cummings, vice president, Ports America and President, Ports Insurance Co. Inc.; Acting Commissioner Ken Kobylowski; and Richard Wright, senior vice president, Willis Captive Consulting Practice.

For more information of New Jersey’s captive insurance law, and applications process, go to: www.state.nj.us/dobi/division_insurance/captive/

To view Bulletin 11-08, which provides information on how to establish a captive insurance company in New Jersey, go to: www.state.nj.us/dobi/bulletins/blt11_08.pdf

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