Posted on 06 Dec 11
New Jersey's nascent captive insurance market expects to welcome its third captive next week, with several other applications in the pipeline, regulators said.
"We've got two-and-a-half captives right now, we hope to approve another one next week," said Crosby Sherman, the first chief of captives for the New Jersey Department of Banking and Insurance.
"We are, as they say, late to the game, but the alternative risk transfer market has come a long way. Captives are part of that, and I think the whole industry is growing as a whole," Sherman told Best's News Service at the 2011 Commissioner's Insurance Symposium, held Nov. 30 in East Brunswick, N.J.
Sherman said at least two other entities at the symposium indicated they'd file captive applications in the next few weeks.
"I think that will be a success if we have three or four or five before the year-end," Sherman said.
New Jersey opened its doors as a captive domicile in May, following Gov. Chris Christie's signing the law in February.
New Jersey recently licensed its second captive insurance company, which will cover past liability exposure for a medical center.
"It's a very exciting time," said New Jersey Insurance Commissioner Thomas B. Considine.
"It's been busy in terms of applications, and the amount of discussion has been incredibly high."
New Jersey has such a vibrant industrial sector, that it didn't make sense for New Jersey companies to go to other states or offshore to launch a captive, Considine said.
Also, an additional benefit of the new law is if New Jersey-based insurance companies -- such as Prudential Insurance Company of America -- launch a captive, then New Jersey can regulate the entire company, including the holding company, insurance company and captive company.
"It gives us a more complete view of the entire company," Considine said.
In July, Prudential Insurance Company of America was the first to launch a captive insurance company in New Jersey.