[Congressional Record Volume 160, Number 122 (Thursday, July 31, 2014)]
[Senate]
[Page S5222]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself and Mr. Graham):
  S. 2726. A bill to clarify the definition of nonadmitted insurer 
under the Nonadmitted and Reinsurance Reform Act of 2010, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. LEAHY. Mr. President, today, I introduce the Captive Insurers 
Clarification Act. This simple, commonsense legislation will clarify 
terms included in the Dodd-Frank Wall Street Reform and Consumer 
Protection Act that stand to threaten the viability of the captive 
insurance industry in Vermont, South Carolina, and across the country. 
I am glad to have Senator Graham's support in this effort.
  Vermont is one of the leading onshore captive insurance domiciles in 
the country, with over 1000 licensed captive insurance companies. I 
have heard from the captive industry in Vermont, understandably 
concerned that language included in the Dodd-Frank Act may result in 
the double taxation of captives that operate in states where their 
headquarters are not domiciled. The Nonadmitted and Reinsurance Reform 
Act, NRRA, as included in Dodd-Frank, intended to facilitate the proper 
collection and allocation of self-procurement taxes. Captives are taxed 
and regulated in the state in which they are domiciled, not necessarily 
where their corporate headquarters are located. However, due to the 
ambiguity of the NRRA, captive insurers are concerned that both the 
state in which a captive is headquartered, and the state in which the 
captive is domiciled, may claim the premium tax.
  The Captive Insurers Clarification Act would simply clarify that such 
companies were never intended to be included under the Nonadmitted and 
Reinsurance Reform Act. Applying the NRRA to captives would eliminate 
the specialized regulation of the captive industry that states like 
Vermont have worked to cultivate.
  This is commonsense legislation to clarify the intention of Congress 
in passing the Nonadmitted and Reinsurance Reform Act, and I hope 
Members of Congress will support its enactment.
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