Captive insurance questions
When did Oregon become a captive insurance state?
The law allowing captive insurers became effective July 2012.
What types of captives are allowed?
Oregon allows these types of captive insurers:
- Pure captives, which insure the risks of their parent, affiliate, or controlled unaffiliated business
- Association captives, which insure the risks of an affiliate, a member organization of its association, or an affiliate of a member organization of its association
- Branch captives, which are similar to a pure captive, except they are domiciled in a country outside of the United States that imposes statutory or regulatory standards
- Captive reinsurers, which reinsure the risks of a captive insurer
What types of coverage can a captive provide?
Captive insurers can provide any line of insurance, except workers' compensation, life, health, or any personal property or personal line of insurance, including personal motor vehicles and homeowner insurance.
What are the minimum capital and surplus requirements?
The minimum requirement is $250,000 for a pure captive insurer, $750,000 for an association captive insurer, and $300 million for a captive reinsurer. The minimum capital and surplus required may be in the form of cash or cash equivalent or an irrevocable letter of credit issued by an insured institution and approved by the director (Form 4942).
How does Oregon regulate investments?
Association captives must comply with the same investment restrictions as a traditional insurance company, as outlined in ORS 733.510 to 733.780. A pure captive may invest in allowable investments under ORS 733.510 to 733.780 without any restrictions, except that the Division of Financial Regulation will not allow investments that threaten the solvency or liquidity of the captive. Captive insurers must file a description of their investment strategy as part of the initial application. Captives must notify the division of any future changes to that investment strategy. A captive insurer may not make any loans to the parent or affiliate of the captive insurer.
What does Oregon charge for a certificate of authority?
Oregon's fee is $5,000 for the initial certificate of authority (or permit to organize as a captive) and the same amount annually to renew.
What other taxes are applicable to captives in Oregon?
Captives are subject to property tax on any property owned by the captive insurer. Although no premium tax is charged, the company is subject to the corporation excise tax. This is due one month following the due date of the federal return (April 15 for a calendar-year filer). Learn more from the Department of Revenue by calling 503-378-4988.
Are captive insurers covered by a guaranty fund?
What must a captive do to operate as a captive in Oregon?
- Obtain a certificate of authority from the Division of Financial Regulation
- Appoint a resident registered agent to accept service of process
- Hold a board of directors meeting in the state at least once a year
What do I need to do to redomesticate in Oregon?
The following documents are required:
- Certified copies of articles of association, charter, or other organizational document.
- Captive insurance company application.
- Biographical affidavits.
- Year-end financial statement and the most recent quarterly statements. For example, a company that redomesticates in December 2012 must file a quarterly statement for the first, second, and third quarters of 2012, in addition to the 2011 annual statement.
- Audited financial statement.
- Most recent examination report.
- Actuarial opinion.
- Contact person information in your domiciliary insurance department.
- No Objection Letter from state of domicile.
How do you monitor the ongoing financial solvency of captives?
The Division of Financial Regulation examines all its captives at least once every three years. The insurer bears the costs. Additionally, by March 1 of every year, captives must file a year-end report on the financial condition of the company and file other documents. A more complete list of annual filing requirements is available on this website.