On October 25, 2010, the New Jersey Assembly passed A.2360 (the “Bill”) by a vote of 77-0, which would permit a captive insurance market to exist in New Jersey. The Bill is based largely on Vermont's captive insurance bill, which is generally viewed as the state model with the best design for the captive insurance market so far.
Under the Bill, a new captive insurer would be required to have a minimum unimpaired paid-in capital and surplus of $250,000 for a pure captive insurance company, $500,000 for an industrial insured captive insurance company, $500,000 for a sponsored captive insurance company, or $750,000 for an association captive insurance company. Annual taxes would range from $7,500 to $200,000 depending on the amount of business conducted. Captive insurers would be permitted to conduct property and casualty or life and health business, including contracts or policies of life insurance, health insurance, annuities, indemnity, property and casualty, fidelity, guaranty and title insurance.
The Bill will now head to the New Jersey Senate for consideration. Click here for the full text of the Bill.