Oklahoma Insurance Commissioner John Doak recently announced that a proposed new law paves the way for more insurance companies to do business in Oklahoma.
Senate Bill 1617, requested by Oklahoma Insurance Commissioner John Doak, caps the premium tax on captive insurance companies at $100,000. Captive insurance refers to a subsidiary corporation that provides insurance to the parent company and its affiliates. It allows corporations and groups to take financial control and manage risks by underwriting their own insurance rather than paying premiums to third-party insurers.
Oklahoma has allowed captive insurance companies to operate in the state since 2004, but the law didn’t attract any new business to the market. The Oklahoma Insurance Department (OID) discovered that captive insurance companies were instead choosing to operate in states with a cap in premium tax. In fact, several Oklahoma-based companies are domesticated in Vermont.
The OID asked for a change in the law in order to attract new businesses to the state.
“This law sends a strong message to the captive insurance industry. Oklahoma is open for business. We have a robust regulatory system and this is a great place to be,” Commissioner Doak said.
The Oklahoma Legislature gave final approval to the measure on May 25. Once Gov. Mary Fallin signs the bill into law, it takes effect immediately.