Thinking of forming a Delaware Captive? Captive Insurance Company Application/Licensing Process
Delaware Captive Law
In 2005 the Delaware General Assembly passed House Bill 218, modernizing Delaware law regarding the formation of captives and positioning Delaware to become home to the growing number of captive insurance companies being created worldwide. Laws passed in 2007 and 2010 have again made Delaware a more attractive domicile by adding Branch Captive Insurance Company and Agency Captive Insurance Company legislation.
| · In 2005, Delaware enacted the Delaware Revised Captive Insurance Company Act, Chapter 69 of Title 18. |
| · In 2007, Delaware enacted House Bill 214, which allows for the formation of Special Purpose Financial Captive Insurance Company (“SPFC”) |
| · In 2010, House Bill 314 added Agency & Branch Captives as additional forms of captive insurance explicitly permitted. |
| Requirements: |
| · The captive must have its principal place of business in Delaware. |
| · There is no requirement to retain a Delaware based captive manager. |
| · Delaware domiciled captive insurers may file their financial statements using GAAP accounting. |
| · Examinations of the captive’s affairs occur once every 3 – 5 years as determined by the Commissioner. |
| · A captive is required to have at least one meeting of its governing body annually in Delaware. |
| * Directors may participate in a board meeting telephonically or with other communication methods. |
| Taxes & Fees | |
| Captive Company Application/Processing Fee | $300/$3,200 |
| The Series Captive Company Application/Processing Fee | $300/$3,200 |
| Minimum Premium Tax to be paid by a series captive company | $3500 |
| Annual License Renewal Fee: | $400 |
| Direct Premium Tax Rate: | 2/10 of 1% per § 6914 (Total Gross Direct Premium x .002)* |
| Annual Maximum Direct Premium Tax | $200,000 |
| Reinsurance Premium Tax Rate: | 1/10 of 1% per § 6914 (Total Reinsurance Premium x .001)* |
| Annual Maximum Assumed Reinsurance Premium | $110,000 |
| Aggregate Tax Annual Minimum: | $5,000 |
| Division of Corporations Franchise Report Annual Filing Fee | $50 |
| *The minimum aggregate tax to be paid by a captive annually is $5000.00 | |
| Minimum Capital & Surplus Requirements | |
| Pure Captive | $ 250,000 |
| Agency Captive | $ 250,000 |
| Association | $ 750,000 |
| Branch Captive | $ 250,000 |
| Industrial Insured | $ 500,000 |
| Risk Retention Group | $1,000,000 |
| Sponsored | $ 500,000 |
| Special Purpose | $ 250,000 |
| Special Purpose Financial Captive | $ 250,000 |
