Arkansas Licenses First Captive

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By Caroline McDonald

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The captive domicile of Arkansas, which passed captivelegislation in June of 2001, announced it has licensed its firstcaptive.

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The captive, AMC Re, was formed by American ManagementCorporation, an insurance agency in Conway, Ark. The new captivewill reinsure risks written or placed by its parent company,according to the Arkansas Insurance Department.

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David Grimes, treasurer for AMC, said the company chose todomicile in Arkansas because it was located in the state.

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He said AMC, which currently has a captive cell in Bermuda thatwrites its workers' compensation, formed a producer reinsurancecaptive, which he said is somewhat “unique to the Arkansas law.”The producer reinsurance captive allows the agency to set upindividual protected cells for various clients for risks written orplaced through the agency, he said.

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“We're excited to have the captive option available to offer toinsurers,” said Lenita Blasingame, deputy commissioner for theArkansas Insurance Department.

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“We're looking forward to helping it grow. We realize we're newand we're obviously working to make Arkansas an attractive optionfor captives,” she said.

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Ms. Blasingame said the state offers “a good regulatoryenvironment.” The department works closely with captives “toexpedite the process of establishing a captive and getting itlicensed here,” she said.

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She said that the domicile, at this point, does not employ aseparate captive division within the insurance department.Currently captives are handled out of the department's legaldivision with the assistance of the finance division.

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Arkansas regulations, she explained, are “almost a combinationof Vermont and South Carolina, with the best of both.”

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One thing the Arkansas captive law requires is that portions ofthe captive companys assets be reinvested in Arkansas bonds andsecurities. Those investments are to be used by the state or localcommunity to support hospitals and improvement projects, accordingto the department of insurance.

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So far the domicile has had inquiries from organizations“looking for niche areas that they are trying to fill,” she said.“With the options we have available in our law,we can help[organizations] structure the captive to fit into one of thoseoptions,” she said, describing the Arkansas captive law as one thatallows for a “broad and diverse” array of captiveopportunities.

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Geographically, she said, the department is located in LittleRock, which is at the center of the state.

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The domicile is also located at the “center of the UnitedStates. Hopefully that's an attractive plus,” she said.

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Of the two organizations now considering a captive in thedomicile, Ms. Blasingame said one is located in the state and oneis outside of the state.


Reproduced from National Underwriter Edition, March 10, 2003.Copyright 2003 by The National Underwriter Company in the serialpublication. All rights reserved. Copyright in this article as anindependent work may be held by the author.


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