- No premium tax in addition to the annual $5,000 fee,
- Minimum capital requirement can be in the form of $100,000 unimpaired paid in capital and $150,000 free surplus for a total capital requirement of $250,000,
- And annual certification of loss reserves and expense reserves (individual certifying must be approved by commissioner) is required rather than a full actuarial opinion.
A potential disadvantage is that at least one Board of Directors’ meeting per year must be held in Utah.
The retirement of experienced captive professional Ross Elliott as the Utah Captive Insurance Director, in early 2014 is also of concern. During his tenure of nearly 5 years, Ross was responsible for growing Utah’s international ranking from 12th to 4th in terms of domiciled captives regulated.
Ross’ replacement, David Snowball has 4 years of experience working in the captive division of the Utah Insurance Department. In the years prior, he owned an income tax preparation business and was a comptroller for a construction company. Hopefully, there will not be any major problems that arise from the transition of one captive insurance director to another.
Utah Captive Insurance Growth
Utah’s captive insurance industry grew rapidly in 2012 at a rate of 26%, making it the country’s second largest onshore captive domicile, as well as one of the fastest growing captive domiciles in the world.
“Utah has been very attractive for companies and industries eager to start a captive,” said Brad Eichers, a director of the Utah Captive Association and CEO Kornerstone Guaranty Insurance. “The state is extremely business-friendly to captive owners. They don’t over regulate and the fee structures are reasonable,” he added.
Utah has developed a substantial following among smaller 831(b) captives.
“The state has established a good following among 831(b)s. The state does not have premium tax on captives, opting instead for a flat renewal fee regardless of the size of the company. The captive division of the Utah Insurance Department is funded exclusively by the license renewal fees from the captive insurance companies and is not dependent on the state’s general fund. (Captive Review)
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