Twenty-eight years after Parrish Medical Center established a single-parent captive to write medical malpractice insurance, Florida has issued its first in-state captive license.

       Florida, also known as the Sunshine State, updated its captive statute in 2013 but has taken a relatively low-key approach to captive promotion.

       The captive insurer of Parrish Medical Center (PMC) was approved on August 11, 2016 and is managed by USA Risk Group. It will write various casualty, medical malpractice and other liability coverages for Parrish Medical Center. Parrish Medical Center is a non-profit public acute care hospital located in Titusville, Florida. Its premium structure fully meets the requirements of U.S. Section 831(b).

        Nathan Adams, a partner at law firm Holland & Knight, wrote in a blog post that the state is "open for business" for captive formation, that developing the captive industry benefits in-state companies, and that the mandatory minimum annual meeting requirement also benefits local tourism.

        Captive insurers established in Florida currently cannot write property insurance business related to workers' compensation, employers' liability, life, health, personal motor vehicle or personal residential coverage.

        "Because property insurance rates in Florida are relatively high, forming a captive locally should be more attractive," Adams said.

        Under Florida law, a single-parent captive formed by a non-profit entity must have net assets of at least US$250,000 and initial paid-in capital of at least US$100,000 before losses are paid; a captive insurer formed by an ordinary commercial enterprise must have paid-in capital of at least US$200,000 before losses are paid. For a for-profit single-parent captive, the minimum funding requirements include initial paid-in capital of not less than US$100,000 before losses are paid and unimpaired surplus of US$150,000.

Source: Captive Review