Arizona Licenses First Captive Insurer

The Arizona insurance department issued the states first captive insurer license last month, and a representative for the regulatory agency said that more legislation to expand captive options might be in the works.

The license was issued to Triad Commercial Captive Insurance Company, owned by Grant Goodman.

Triad will write commercial automobile, general liability, and inland marine coverages for Rockland materials, located in Phoenix, and Stirling Bridge Cement, a Rockland affiliate which was recently established in Drake, Ariz., according to the department. Mr. Goodman has a controlling interest in both companies and the captive.

“I am confident Triad Commercial will be the kind of safe, sound, high-quality captive insurance program that will typify Arizona captives,” according to Charles R. Cohen, Arizona's director of insurance.

Mr. Cohen said that the state's first captive was licensed last month under the state's new captive law, which went into effect on July 1.

“The seriousness of the other inquiries we have had demonstrates that Arizona is well positioned to develop into a significant captive domicile,” according to Mr. Cohen.

The captive insurer law, HB 2116, enacted in 2001, was sponsored by Rep. Ted Carpenter, R-Maricopa, who chairs the Financial Institutions and Insurance Committee.

“The captive insurance program, in my opinion, helps make Arizona an attractive insurance market,” according to Rep. Carpenter. “The added requirements built into the legislation will promote Arizona as a viable domicile for captive insurers.”

Richard Marshall, appointed captive insurance administrator for the Phoenix-based Arizona Department of Insurance in February, said in April that he is working to improve the state's captive legislation by expanding protected-cell agency captives and non-association group captives.

An insurance department representative confirmed that the regulatory agency is “contemplating a bill for the 2003 legislative session relative to captive laws.”

Mr. Marshall said that interest in the domicile has been high because of the state's existing and proposed captive legislation, the hard insurance market, and the state's location.

The domicile, he said, is drawing interest from the upper Midwest–Minnesota, Chicago and Detroit, specifically–as well as West Coast states as an alternative to Hawaii.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 16, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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Arizona Licenses First Captive Insurer

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