Do a captive's service providers have to be located in Utah?
No physical presence for providers, but the captive needs a resident director
Travis Wegkamp says Utah does not require a captive's service providers to have a physical presence in the state, which he notes distinguishes it from some other domiciles. Three provider types do need authorization from the department and must come from its approved listings: the management firm, the actuary and the independent CPA. The one genuine local requirement is different in kind: Utah's code requires the captive itself to have a director who is a resident of the state.
The residency question matters because it drives cost. A domicile that requires local providers narrows the field a captive can buy from, and narrowing the field tends to raise the price. Wegkamp is aware that some domiciles impose that requirement and says plainly that Utah is not one of them.
Providers do not need to be in the state. They do need the department's authorization for three specific roles, and those roles have to be filled from the approved listings the department publishes.
Key takeaways
Utah does not require captive service providers to have a physical presence in the state, unlike some other domiciles.
Three provider types need department authorization and must come from its approved listings: the management firm, the actuary and the independent CPA.
Utah code requires the captive to have a director who is a Utah resident, and there is no approved listing for that role.
The three are the management firm, the actuary and the independent CPA. That set is worth reading as a statement about what the department relies on: the firm running the captive day to day, the person setting the reserves, and the person checking the numbers independently.
Everything else a captive buys sits outside that authorization regime.
From the conversation
Travis Wegkamp
Director, Captive Insurance Division, Utah Insurance Department
“That is not a requirement here in the state.”
Transcript
Read the full transcript 5 turns
Hostdoes Utah have requirements that those service providers have to be set up in Utah or have a physical presence? I know some domiciles have
Travis Wegkampthat. Can you touch on that? Yeah, I
Travis Wegkamp'm very proud of the domiciles with that requirement. That is not a requirement here in the state. They don't need to have a physical presence here in Utah to be to be a service provider. The three providers that require authorization from us to provide those services to Utah captives, the first one being the management firm, and then the actuary and the independent CPA. Those are the three required ones that need to be from our approved listing on our website
Travis Wegkamp. The only potential one you might include under there is there is a requirement in the code that the captive have a director that's a resident of the state of Utah. So, they need to get a director that's a resident here to help represent them and just have that presence here in the state. There's no approved listing for that. There are a few lawyers
Travis Wegkamplocally that do a lot of that work and help out a lot of captives here that will provide those director services as well, and there are a few others that just offer the director services. So, that's something to keep in mind, but not an actual authorized approved listing on our website for those
Citations
Sources
- Captive, Utah Insurance Departmenthttps://insurance.utah.gov/captive
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