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Division of Insurance Approves NV Energy Captive
December 21, 2009 – Carson City, NV – Nevada Insurance Commissioner Scott Kipper has announced that NV Energy’s application to form a captive insurer has been approved, giving the company the tools needed to better manage risk and control its own insurance costs.
Captive insurance is a regulated form of self-insurance, in which the insurer is owned wholly by the insured. It is organized for the purpose of self-funding the owners’ risks, and provides individual companies or groups with coverages they need but can’t readily obtain through the traditional insurance market.
“I’m very proud of what Nevada has been able to accomplish with its captive program, and I look forward to continued success in making Nevada an alternate risk management center for the Western U.S.,” Insurance Commissioner Kipper said. “With our consistent and responsive regulatory environment, it’s not surprising that we have become a domicile of choice among captive insurers.”
NV Energy is just one success story among many for Nevada, which is the fourth largest domicile in the U.S. for captive insurers. Currently, 125 active captive insurers call Nevada home, and the Division of Insurance is on track to approve 14 more for the month of December.
This valuable sector of Nevada’s economy was responsible for generating more than $1 million of premium tax and fee income for the state in 2009. This growing industry also is responsible for providing non-gaming, non-polluting jobs for Nevadans, including actuaries, captive managers, consultants, accountants, claims managers and financial advisors, as well as technical and legal support.
“NVEnergy is excited about the future of our Nevada domiciled Pure Captive and the numerous commercial advantages NVE Insurance Co., Inc. will provide,” said Kirk Cresto, Director of Risk Control for NV Energy, Inc. and President of NVE Insurance Co., Inc. “Our Nevada Pure Captive is a powerful resource that will provide flexibility, better claims management and lower overall cost of insurance premiums.”
Captives can suit a wide range of companies, from large, corporate structures forming pure captives to smaller companies, which can align with similar businesses and participate in group, association or sponsored captive programs.
Many types of companies have chosen Nevada as a domicile, such as small groups of health care providers, family-owned manufacturing and agricultural companies, trade associations and multi-state utility companies. The types of risks captive insurers underwrite include property damage, public and product liability, professional indemnity, employee benefits, employer’s liability, motor and medical aid expenses. Because of this versatility, captives are becoming an increasingly important component of the risk management and risk financing strategy of many companies.
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