Arkansas Licenses First Captive

"We're excited to have the captive option available to offer to insurers," said Lenita Blasingame, deputy commissioner for the Arkansas Insurance Department. "We're looking forward to helping it grow. We realize we're new, and we're obviously working to make Arkansas an attractive option for captives."

Ms. Blasingame continued, "I'm not sure we're that unique compared to some other domiciles that have attracted a large number of captives, other than we feel we have a good regulatory environment."

She said the department works closely with captives "to expedite the process of establishing a captive and getting it licensed here."

She added that the domicile at this point does not have a separate division within the insurance department to work with captives. Currently, captives are handled out of the department's legal division with the assistance of the finance division.

Arkansas regulations, she said, are "almost a combination of Vermont and South Carolina, with the best of both."

One thing the Arkansas captive law requires is that portions of the captive company assets be reinvested in bonds and securities in Arkansas. Those investments are to be used by the state or local community to support hospitals and improvement projects, according to the department of insurance.

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, it's broad and diverse enough that we can help them structure the captive to fit into one of those options."

She said the department in Little Rock is located at the center of the state, which is at the "center of the United States. Hopefully, that's an attractive plus."

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