Incorporated Cell Legislation Passed by South Carolina General Assembly

COLUMBIA, S.C. - June 2, 2014 - PRLog -- Columbia, SC – June 2, 2014 – The South Carolina Senate passed bill, S. 909 with added incorporated cell legislation yesterday morning. The legislation was sponsored by the South Carolina Department of Insurance for the purpose of updating South Carolina’s current captive insurance law to provide additional options to businesses interested in domiciling in South Carolina. The revised law will aid in attracting new business to the state and keeping South Carolina competitive with other US captive domiciles.

South Carolina Captive Insurance Law (Title 38, Chapter 90) currently includes provisions that were adopted in accordance with National Association of Insurance Commissioners (NAIC) accreditation standards. These provisions are intended to apply to all risk retention groups domiciled in South Carolina, and in general are drafted to apply to all “industrial insured captives” as defined in Section 38-90-10(17).  S. 909 was drafted by the Department of Insurance to make technical amendments to clarify that all risk retention groups domiciled in South Carolina must comply with the accreditation standards.

In addition to the clarification to the captive law above, S. 909 amends South Carolina’s current Protected Cell Legislation to allow for these individual cells to incorporate. A Protected Cell is a company which has been separated into legally distinct cells, which allows the assets and liabilities of individual cells to be separate from one another. The incorporated cell legislation passed as a part of S. 909 now allows each of these protected cells to incorporate which adds a layer of protection from potential adverse experiences of other cells in the structure.

The passage of this legislation further strengthens and supports South Carolina’s position as a leader in domiciles for captive insurance companies in the US and worldwide. It accurately demonstrates our commitment to keep pace with the changing needs of the captive industry while maintaining our reputation as a strong and supportive regulatory environment.

When asked about what the passage of this legislation meant to the industry, South Carolina Captive Insurance Association (SCCIA) President, Chris Stormer responded, “We are very excited about the opportunities the passage of this legislation means for the membership of the SCCIA and others serving the captive industry here in South Carolina. The passage of this legislation further strengthens and supports South Carolina’s position as a leader among domestic and international captive domiciles. A special thanks to the leadership of the South Carolina Department of Insurance (SCDOI) – Ray Farmer, Gwen McGriff, Jay Branum and their entire team for sponsoring this legislation and for their tireless efforts. I also cannot forget to the leadership of the South Carolina Senate and House of Representatives who through their legislation continue to proactively position South Carolina as a leading domicile for captive insurance companies. To echo our governor’s catch phrase – ‘it’s a great day in South Carolina’.”

There are more than 30 states with captive insurance legislation that currently serve as US domiciles for captive insurance companies. South Carolina is one of the industry’s premier domiciles and is one of the most mature onshore domiciles. Each year the captive insurance industry contributes over a billion dollars to South Carolina’s economy.

Captive insurance companies are regulated insurance companies established by companies or groups of companies as an alternative to traditional insurance and are designed toallow owners of these companiesbetter manage their own risk. Since the passage of South Carolina’s Captive Insurance law in 2000, over 240 captives have been licensed in South Carolina.

For more information about South Carolina’s captive industry, visit www.sccia.org.