Delaware’s state Senate has amended captive insurance laws on order to give the insurance commissioner additional flexibility to approve the types of financial institutions that would be authorized to hold required capital and surplus of captive insurance companies.

The bill, SB 249, which passed 19-1, has now been referred to the Delaware House of Representatives, which must also pass the bill for it to become law.  

An explanatory memorandum explained: “This bill amends Chapter 69 of Title 18 relating to captive insurance to provide the Commissioner with additional flexibility to approve those types of financial institutions that would be authorized to hold required capital and surplus of captive insurance companies. 

“This change would recognise the current financial environment and practices of financial institutions and captive insurers. Assets can be safely held in financial institutions other than banks and do not need to be held in Delaware in many circumstances where the type of risk does not require it, and the Commissioner will be authorized to impose additional conditions on captives related to capital and surplus to ensure the solvency and efficient operations of captives.”

The House committee on Economic Development/Banking/Insurance & Commerce is now expected to take up the bill within 12 days of its passage from the Senate, which took place on April 25.