(Southern Pines)……The summer heat returned to North Carolina in mid-June with temperatures across the state in the 90s. June also caused the General Assembly to focus on the remaining bills from the long session as well as a flurry of local legislation and the Budget adjustment for the second year of the biennium. All three historically are staples of short session activity.
As previously reported Governor Roy Cooper (D) has now signed SB 347, The Captive Practice Act Amendments Bill into law. The legislation has now become Session Law 2022-7. If you would like to read the new statute (click here).
North Carolina’s elected Commissioner of Insurance Mike Causey commented after the bill’s signing that “We are grateful to all parties involved in getting this law over the line.” Commissioner Causey continued, “Each of those who participated were committed to making North Carolina a great home for captive insurance companies. The time is right for those that want to be a part of the North Carolina captive program to make the move to our great state.”
North Carolina is a relative newcomer to the captive insurance industry, when the N.C. General Assembly enacted the state’s captive insurance law in 2013. With passage of Senate Bill 347 and its technical corrections, companies that formed their captive insurance companies in other jurisdictions will have a strong incentive to consider moving them to North Carolina, a welcoming domicile for captive insurers.
The new law also includes a waiver of premium taxes for the year in which any captive insurer, whether onshore or offshore, moving its home base to North Carolina, as well as a waiver of the next year’s premium taxes. It is thought that the premium tax holiday will entice those captive owners to move their captives to North Carolina.
Additionally, the new law modifies the captive insurer audit exemption provision by granting the Commissioner the authority to consider captive insurers’ requests for an exemption from an audit when the cost would pose a financial hardship. Exemption requests from the annual audit and actuarial opinion requirement based on financial hardship will be considered by the Commissioner on a case-by-case basis.