Known for its cherry blossoms in early Spring, Mount Vernon, the National Cathedral and so much American history, the District of Columbia has now become a home for captive insurance. The idea of planting cherry trees along the Potomac waterfront came from Eliza Ruhamah Scidmore after her first visit to Japan in 1885. But it took more than 25 years for her idea to take root. George Washington inherited Mount Vernon in 1761 and expanded the property from 2,000 to 8,000 acres with five working farms. When Pierre L’Enfant designed Washington, DC, his plans included the building of a national church. In 1907 the foundation stone – a stone from Bethlehem inserted into a larger piece of American Granite – was laid, with President Roosevelt and the Bishop of London on hand to address the crowd of 10,000. The District of Columbia’s captive insurance law was passed in 2004 as the Captive Insurance Company Act of 2004. It was amended in 2006 by the Captive Insurance Company Amendment Act of 2006. Risk Retention Groups formed in the district are governed by the captive act.
The District of Columbia has licensed 108 captives. They cover a number of industries including automobile, health care and elder services, real estate and construction, banking and financial services, and shipping/transport and logistics. Coverage provided includes workers’ compensation, general liability and umbrella, medical malpractice and professional liability, business interruption, property, DIC, premises and event liability, terrorism, environmental/pollution clean-up, employment practices, D&O, and fidelity and surety.
The Commissioner of the District of Columbia and the Department of Insurance has regulatory authority over captive insurers. One segment of the insurance marketplace that has a natural draw for DC is the association business. Most national associations are headquartered in DC.
USA Risk Group services the District of Columbia clients through our Vermont and South Carolina locations.
- Parity Provision: A modern, progressive captive insurance law that meets the demands of the marketplace and stays current with market trends. The parity provision will permit a captive to engage in any type of business in Washington that is permitted in any other captive jurisdiction (on-shore or off-shore).
- Direct Insurance Permitted: All commercial lines and excess workers’ compensation insurance, except that no captive insurer may provide personal motor vehicle or homeowner’s insurance coverage or any component thereof. Reinsurance Permitted: A captive insurer may provide reinsurance on risks ceded by any other insurer or reinsurer.
- Policy Form and Rating Organizations: Policy forms are not required to be approved by the Department, except for reciprocals and certain designated lines.
- Investment Restrictions: No restrictions for pure captives. There are restrictions for other forms of group captives.
- Local Office and Meeting Requirements: The Insurer must have a principal place of business in the state, be subject to service of process, and maintain the books and records of the captive insurer's business, transactions and affairs at a location that is accessible to the Commissioner. The insurer’s board of directors, or subscribers’ advisory committee if a reciprocal, is required to have at least one (1) meeting each year in the district.
- Organizational Types: Corporation, Limited Liability Company, partnership, or business trust. Structure & Voting: Stock, mutual, reciprocal or business trust (for special purpose captives). The District of Columbia also allows the incorporation of individual cells within a Sponsored Captive arrangement.
Our Vermont and South Carolina offices are authorized to manage captives in the District of Columbia and offers:
- An executive staff with experience in multiple domiciles, including the District of Columbia, who have formed numerous captives and serve or have served on industry associations
- Strong relationships with the District of Columbia regulators and service providers
- Strict internal controls over all our processes including disaster recovery and state of the art information technology
Jeffrey S. Kenneson, CPA, ARM
Senior Vice President
USA Risk Group, Inc.
1795 Williston Road, Suite 330
South Burlington, VT 05403
Tel: 800/872-7475 X2220