Overview
Title 38, Chapter 90 of the South Carolina Code of Laws defines captive insurance companies and details the required regulations. Captives are an alternate type of self insurance vehicle that affords businesses some flexibility with their risk management strategies. There are different types of captives depending on the best strategy for a business or organization. For example, there are association captives, captive reinsurance companies, industrial insured captives, pure captives, special purpose captives, special purpose financial captives, and sponsored captives.
South Carolina’s captive insurance securitization program is proud to be the premiere domicile for a financially expedient model in an increasingly efficient national insurance market. South Carolina’s captive insurance statutes were the first and most comprehensive legislation allowing captive securitization in the United States. Securitization of the required excess reserves is the most efficient method to relieve insurers and reinsurers of an otherwise significant capital strain issue. South Carolina is the premier jurisdiction for high-quality regulatory oversight in sophisticated financial transactions using the captive platform.
Forming a Captive
Before any licensing documentation is submitted to the Department, an initial meeting should be arranged to discuss the proposed captive and to obtain detailed information about the licensing process. An executive summary detailing the plan of operation for the captive should be presented to the Department at least three days prior to the initial meeting.
The meetings for all captives, except for special purpose financial captives, should be arranged by emailing Jeff Kehler, Program Manager of ARTS at jkehler@doi.sc.gov or calling him directly at 803-737-6118. The meetings for special purpose financial captives (SPFC) should be arranged by emailing Leslie Jones, Deputy Director of Actuarial Services at ljones@doi.sc.gov or Derek McKee, Assistant Actuary at dmckee@doi.sc.gov. You may also reach Mrs. Jones or Mr. McKee by calling them directly at 843-579-0527.
If the Department accepts the proposed plan of operation, a petition for a certificate of general good should be submitted to the Department. Upon receipt of the certificate of general good, the captive must be incorporated by the South Carolina Secretary of State.
Finally, after the captive is incorporated, the licensing process can begin.
Licensing
Captives and Risk Retention Groups: Domestic
- Application [exe 636k]
Complete the application and business plan in full and submit two copies to the Department. These should be organized and separated by section. If a particular section or subsection is not required, applicable or executed, include a written explain.
- Fees
$200 Application Fee
$300 Initial License Fee
$3,200 Review Fee
All checks should be made payable to the South Carolina Department of Insurance. The application fee in non-refundable.
- Application to Certify Aggregate Reserves
- Application to Act as Independent CPA [pdf 136k]
- Cover Letter
The cover letter should provide a complete overview of the parent company, background information on the parent and captive companies, coverages to be provided by the captive, service providers, capital, surplus, etc. Please also indicate the proposed date the captive needs to be licensed.
- Biographical Affidavit [pdf 177k]
- Letter of Credit
Sample letter of credit [pdf 109k]
- Consent to Service of Process [pdf 11k]
- Captive Form A Filing for Mergers [pdf 271k]
- NAIC Company Code Application [pdf 97k]
Special Purpose Financial Captives
- Application
The application will be provided by the Department once the Certifcate of General Good has been issued to the company.
- Fees
$12,000 Application Fee
Half of the application fee is due when the application is submitted and the remainder will be due once the company is licensed.
$200 Processing Fee
The processing fee is non-refundable.
$300 Licensing Fee
The licensing fee is $300 for the year of licensure and $500 annually thereafter.
$2,400 Annual Review Fee, or actual cost if higher.
Miscellaneous fees assessed during the review process (i.e. external reviews)
All checks should be made payable to the South Carolina Department of Insurance.
- Application to Certify Aggregate Reserves [pdf 57k]
This form is required only if the actuary is not on the approved South Carolina list of approved actuaries.
- Application to Act as an Independent CPA [pdf 51k]
This form is required only if the actuary is not on the approved South Carolina list of approved certified public accountants.
- NAIC Biographical Affidavit [pdf 104k]
- Consent to Service of Process [pdf 123k]
- Captive Form A Filing for Mergers [pdf 271k]
SCDOI Contact Information
Jeff Kehler, Program Manager, ARTS
Phone: 803-737-6118 - Columbia
Email: jkehler@doi.sc.gov
Leslie Jones, Deputy Director of Actuarial Services
Special Purpose Financial Captives
Phone: 843-579-0527 - Charleston
Email: ljones@doi.sc.gov
Columbia Office Charleston Office
1201 Main Street, Suite 1000 145 King Street, Suite 228
Columbia, South Carolina 29201 Charleston, South Carolina 29401