Regulators in New Jersey said that Prudential Insurance Company of America has launched the first captive insurance company in the state, with more applications in the pipeline.
Prudential New Jersey Captive Insurance Co. received its certificate of authority effective July 1, the New Jersey Department of Banking and Insurance Department said.
Other applications for captives are currently being reviewed, said Marshall McKnight, a spokesman for the department. He said he couldn't say specifically how many were pending.
Prudential established NJCAP to manage risk in a portion of its life insurance and annuity policies, regulators said. As both a New Jersey-based company and captive, New Jersey regulators have oversight for both the parent company and the captive insurer.
"It's suitable that the first captive is owned by one of New Jersey's largest employers and one of the most recognized names in the nation," said Gregg Sgambati, president of the New Jersey Captive Insurance Association.
New Jersey opened its doors as a captive domicile in May, following Gov. Chris Christie's signature in February.
New Jersey's new captive law is modeled after the tax structure and capital and surplus requirements in place in Vermont, the largest captive domicile among U.S. states (BestWire, Feb. 23, 2011). New Jersey captives will be subject to minimum capital and surplus requirements of $250,000 for single-parent captives and $750,000 for association captives. Premium taxes would be within a minimum of $7,500 and maximum of $200,000. Direct written premiums taxes would be 0.38% on the first $20 million in premiums, 0.285% on the next $20 million, then 0.19% through $60 million and 0.072% on premiums past that level.