The legislation defines a captive insurer as any insurance company primarily insures the risks of its owners and sometimes related or affiliated firms and returns underwriting profit and investment income. Captives are insurers owned by the insured and organized for the main purpose of funding the owner's risks that actively participate in decisions influencing its underwriting, operations and investments. Minimum capital and service requirements provide a significant advantage over traditional captive markets. South Carolina captive law does not require approval of rates and forms, a minimum premium and there are no investment restrictions for pure captives. The state tax rates on premiums collected are competitive with other captive insurance states.
All types of businesses are eligible for participation through the captive legislation.
The Department of Insurance has has developed a team that is ready to assist in the formation of domestic insurers in the State of South Carolina. Though patterned after Vermont, South Carolina s legislation differs in that the director of insurance is given wide discretion in various facets of the operation of the captive insurer. We re a blue sky captive environment, in that we come to this with no preconceived notions and will be ready to consider all business plans. These rates are very competitive and often lower than those charged by other states with captive legislation, depending on the actual premiums collected. Offshore companies in the Bahamas or Caymans have dominated the captive insurance market in past years.