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15th of May 2012

New Jersey licenses third captive from New York

Vicky Beckett 17/01/2012

New Jersey is hoping New Jersey-parented captives will redomicile in the state since it licensed its third captive, which has redomiciled from New York.
 
It has been argued by Gregg Sgambati, founder and president of New Jersey Captive Insurance Association, that if the Dodd Frank Act was to enforce self-procurement taxes, captives could save a large amount of premium by redomesticating to the same state as their parent.
 
Due to the Nonadmitted and Reinsurance Reform Act (NRRA), within the Dodd Frank Act, creating a ‘home-state’ focus, states may be induced to pursue self-procurement taxes from companies that have not paid them and are headquartered in that state, with their captive domiciled in another state.  
 
Sgambati said: “Should the provisions of the NRRA pan out in this manner, New Jersey companies that redomesticate their captives to the state would appear to be able to save being taxed in New Jersey in addition to the state where the captive is located.
 
“I think people inside New Jersey would give a nod and a smile of approval for any New Jersey based companies that redomesticate their captives into the state.
 
The New Jersey captive insurance department are reportedly in the beginning stages of a marketing plan to attract New Jersey-parented captives.
 
When asked about this, Sgambati said: “I don’t know of any formal discussions of a marketing plan in the government yet but I would guess they have been talking it through informally.”

Tags: Captive, Dodd Frank, Insurance, New Jersey, New Jersey Captive Insurance Ass, New York, NRRA, Premium, Redomesticate, Self-procurement, Tax

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