North Carolina’s captive insurance program had a $23 million impact on the economy, up from $15.3 in 2015 and $2.5 million in 2014.
This economic impact was generated by premium taxes paid to the State of North Carolina by North Carolina licensed captive insurers, as well as service provider and hospitality revenues generated by North Carolina businesses that provide services to the North Carolina captive insurance industry, according to a study by the North Carolina Department of Insurance (NCDOI).
“Our captive insurance program has made even greater strides in the last year,” NCDOI Commissioner Causey said. “Businesses from all over are finding that our state’s thorough but fair regulation is a plus when it comes time to choose a jurisdiction in which to domicile a captive insurance company. The future for the captive insurance industry in our state couldn’t look brighter.”
For the first 3 full years of operation, the favorable impact of the industry on North Carolina’s economy has been approximately $41 million, Causey said. Further, it has created 60 new jobs.
Captive insurance is a form of self-insurance through which a business may form its own insurance company to insure its risks. There are several reasons that captive insurance may be beneficial to a business. These may include the ability to obtain insurance coverage that is not readily available or is too costly in the commercial market; reduction of insurance costs; stabilized pricing; and customization of the terms and conditions of insurance products to meet the insured’s needs.