A team of corporate insurance attorneys from Fox Rothschild LLP secured the approval of the State of New Jersey's Department of Banking and Insurance to set up an on-shore captive insurance company to insure underground storage tanks in New Jersey.
IADC member and partner Carl A. Maio, along with Sandra A. Romaszewski, led the Fox team, which secured a captive certificate of authority on behalf of Founders Indemnity Group, Inc. in November 2016.
With the certificate, Founders Indemnity is now licensed to write insurance policies for underground storage tank owners in New Jersey in the areas of liability insurance and property and casualty insurance.
Captive insurance companies are established with the specific objective of financing risks from its owners or participants. Some captives insure just one company while others, like Founders, insure multiple companies within one industry.
Traditionally, most captive insurers are based offshore, but the industry has seen a strong trend toward on-shore captive insurers in recent years, with 33 states and the District of Columbia adopting new laws and regulations to attract captive insurance companies.
Recent statistics show that more than 3,000 on-shore captive insurers were operating in the United States in 2015. Vermont led the way with nearly 600 approved captive insurers, while New Jersey ranked 18 on the list with 22 approved captive insurers.
Complex legal work is involved in securing approval to launch a captive insurer. The Fox team worked closely with actuarial experts, a captive management team, and with the client. They developed a business plan and draft policies and also secured insurance.