Governor Nathan Deal signed Senate Bill 347 into law on May 3, 2016. Senate Bill 347 was sponsored by the Georgia Department of Insurance to make multiple important updates to Georgia’s captive law. The bill received strong support from the Georgia Captive Insurance Association.
Senate Bill 347 makes it easier to form new captive companies, which can mean better and lower cost insurance for small businesses to Fortune 1000 companies. It also improves upon a bill passed last year making it easier for Georgia businesses to manage their risks.
First, Senate Bill 347 authorizes the formation of Agency Captive Insurance Companies with minimum capital and surplus set at $250,000. An Agency Captive Insurance Company is a captive insurer owned by an insurance agency that is authorized to reinsure business written by the insurance agency parent. An agency captive allows an insurance agency to participate in the profitable business it produces. In addition, Senate Bill 347:
- Clarifies that pure captive insurance companies are authorized to write accident and sickness insurance
- Removes the requirement for captive managers to maintain their principal place of business in Georgia
- Updates Georgia’s law to make it easier to form and operate captive insurers in the state
- Exempts pure captives from the insurance company statute
- Clarifies that letters of credit may be used to capitalize pure captive insurance companies
- Extends exemptions from the open records law for records related to agency captives
Senate Bill 347 illustrates the Georgia Department of Insurance’s and Georgia legislature’s continued commitment to the captive insurance industry and follows closely on the heels of last year’s captive bill (HB 552) and its substantial update of the Georgia Captive Law. The changes enacted by Senate Bill 347 will be effective on July 1, 2016.