One of the thirteen original colonies, South Carolina has had a rich history. In 1710 the colony, named Carolina after King Charles I, was divided into South Carolina and North Carolina. Settlers came from the British Isles, France, and other parts of Europe. They built plantations throughout the coastal area, growing rice and indigo. Today South Carolina's economy is not dependent on any one industry. Industries vary from travel and tourism, trade, services, manufacturing, government and construction.
The state of South Carolina is triangular in shape and is bordered by the Atlantic Ocean, North Carolina, and Georgia. South Carolina's climate is humid and subtropical, with long, hot summers and short, mild winters.
Interested in Setting Up a Captive in South Carolina?
- Call Elizabeth Steinman +1 802 651 0142
- E-mail Elizabeth Steinman
More Information
General Information
Applicable Legislation
Act 331, signed by Governor Jim Hodges in 2000, established South Carolina as a captive domicile. The captive industry is governed by South Carolina's Code of Laws Title 38, which includes the captive act, the protected cell act and regulations. Risk Retention Groups are governed by 15 USC3901-3906 of the Liability Risk Retention Act of 1986.
Regulatory Environment
All insurance companies in South Carolina are regulated by the Director of Insurance. Reporting to the Director is the Alternative Risk Transfer Services unit.
General Requirements
- Acceptable insurance subsidiaries include pure or single parent captive reinsurance company, sponsored captive insurance company (using protected cells), special purpose insurance company, branch captive, or industrial insured captive insurance company;
- pure captives can only insure risks of its parent, affiliated companies and/or controlled unaffiliated business;
- principal office and records maintained in South Carolina; and
- state examination every three years.
Annual Requirements
• Premium tax on Direct Premium Written
| 4/10 of 1% | 0-$20,000,000 |
| 3/10 of 1% | $20,000,000 - $40,000,000 |
| 2/10 of 1% | $40,000,000 - $60,000,000 |
| 75/1000 of 1% | $60,000,000 and over |
• Premium tax on Reinsurance Assumed Premium
| 225/1000 of 1%% | 0- $20,000,000 |
| 150/1000 of 1% | $20,000,000 - $40,000,000 |
| 50/1000 of 1% | $40,000,000 - $60,000,000 |
| 25/1000 of 1% | $60,000,000 and over |
Must pay the sum of Direct Written Premium and Reinsurance Assured Premium taxes or $5,000 whichever is greater, subject to a maximum premium tax of $100,000.
• captive annual report (NAIC blank for Associations and RRGs);
• annual audit by CPA firm;
• accountant's letter of qualifications;
• annual actuarial certification; and
• direct economic impact statement.
Minimum Capitalisation and Surplus
| Pure captive | $250,000 |
| Association captive | $750,000 |
| Group captive/industrial insured | $500,000 |
| Letters of credit acceptable |
Permissible Lines of Business
All commercial lines, except statutory coverages, such as workers' compensation and automobile liability. Workers' compensation must be fronted by an admitted insured.
In addition to the costs specified above, there will be annual auditors' charges, actuarial investment management and legal fees.
The information in this document is intended as a general overview of jurisdictional requirements at the time of publication. It is not to be construed as legal advice or opinion and persons reading this publication are advised to obtain independent legal, accounting or tax advice on this regard.
