New York—June 29, 2015—The Nonadmitted and Reinsurance Reform Act (NRRA) failed to explicitly exclude captives from the definition of nonadmitted insurer, leaving insureds unclear on whether independent procurement taxes on the insurance purchased from their captive must be paid to their home state in addition to the captive domicile.
RIMS supports the reintroduction of the Captive Clarification Act that would officially omit captives from the NRRA, providing risks professionals with greater clarity on expenses associated with their organization’s captive investment. The bill was reintroduced by Sen. Patrick Leahy (D-VT) and Sen. Lindsey Graham (R-SC).
RIMS President Rick Roberts said, “For risk professionals to successfully manage alternative risk programs like captives, we need a clear understanding of government regulations. The NRRA, in its original form, leaves risk professionals guessing as to whether their organizations will be taxed twice and even whether they need to change the location of their captive.
“The Captive Clarification Act clears up that uncertainty. We fully support Sen. Leahy and Sen. Graham’s reintroduction of the legislation and hope that a committee hearing and companion bill from the House will follow soon.”
For more information about the RIMS External Affairs Committee and the Society’s legislative priorities, please visit www.rims.org/externalaffairs/PositionStatements.