N.Y. Licenses Its 42nd Captive

The New York Insurance Department has licensed the state's forty-second captive, an entity that will insure a midtown real estate project of Silverstein Properties, the developer of the World Trade Center, it was announced.

Insurance Superintendent Eric Dinallo said River Place II, LLC, a large Silverstein residential development, will be insured by RP Captive Insurance Company Inc. (RPIC).

"The insurance department welcomes RPIC and congratulates River Place II on taking advantage of all that New York offers to captive insurance companies," Mr. Dinallo said.

"New York, the real estate capital of the world with its investment management talent and vibrant financial services industry, is the natural home for captives," said the superintendent.

According to the insurance department, RP Captive Insurance Company Inc. is the forty-second captive insurance company licensed to operate in New York State. It will insure TRIEA (Terrorism Risk Insurance Extension Act of 2005) losses and other lines of business on behalf of River Place II, LLC.

It was noted that captives were not permitted in New York prior to the 1997 signing of the Captive Law.

Captives are created when a business or group of businesses form a corporation to insure or reinsure their own risk. These self-insurance vehicles frequently enable New York businesses to pay lower insurance premiums, tailor coverage to specific needs, access the reinsurance market to transfer risk and gain greater control over claims.

Shortly after the law went into effect, the insurance department launched its Captive Group in order to encourage companies to establish alternate insurance programs such as captives in New York State.

Jody Wald, captives coordinator of the department's dedicated Captive Group, led the department's handling of the licensing process for the Silverstein captive.

Information on developing a licensed captive is available by calling the New York State Insurance Department's Captive Group toll-free at 1-866-NYS-CAPT (1-866-697-2278), or by visiting the group's Web site, www.nycaptives.com.

Companies can download the necessary application forms as well as a copy of the law from the site. The approval process for licensing a captive insurer, the department said, often takes less than 30 days.