FOR IMMEDIATE RELEASE
DEPARTMENT ANNOUNCES LICENSING OF MOODYS CORP. CAPTIVE
1997 Captive Law Encourages Corporations to Form Self-Insurance Entities
Superintendent of Insurance Gregory V. Serio today announced that the State Insurance Department has licensed Moodys Assurance Company Incorporated as a captive insurance company in New York. The new captive, which has been incorporated, will be insuring the risks of Moodys Corporation. Captive insurance companies are traditionally used by large corporations as a risk management strategy to insure their own risks.
"I am pleased to announce that Moodys has created a captive here in New York State," said Serio. "In the contraction of the commercial insurance market, the formations of captives is a valuable and more flexible option for companies in managing their insurance needs. Since 1997, New Yorks businesses are no longer forced to look outside of the State to implement their risk management strategies."
Moodys is the third corporation to take advantage of legislation signed into law in August 1997 by Governor George E. Pataki that permits captives to become licensed in New York State. The law became effective December 5, 1997. In March of this year, new legislation, S.6591, was forwarded by the Governor to allow a wider range of businesses the opportunity to utilize captive insurance companies.
"By allowing corporations such as Moodys to set up their insurance programs here, we are addressing the critical needs of business in New York, namely, cutting costs for these corporations--who in the past had to maintain separate staff and offices in another jurisdictions. This is a win for New York State as well as our business community," said Serio.
Prior to 1997, captives were not permitted in New York and had been headquartered in a small number of states or off-shore in jurisdictions such as Bermuda. These companies had avoided larger states like New York whose complex regulatory rules and lengthy approval procedures of the past had stymied innovative alternative insurance programs such as captives.
All the information necessary to become licensed as a captive is available by calling the Department or by visiting its website at www.ins.state.ny.us. The Department will shortly unveil a new Web site dedicated to captive development in New York. Companies can quickly download the licensing forms as well as a copy of the law from the site. The approval process for licensing of a captive insurer is estimated to be only 30 days.
Moodys will join New Yorks other two captives, the Metropolitan Transportation Authoritys First Mutual Transportation Assurance Co. and Columbus-McKennon Inc.s CM Insurance Company, Inc. The Department has also given regulatory approval of GVP Risk Management Insurance Incorporated to become a captive insurance company in New York. GVP, which has been incorporated and will be issued a license shortly, will be insuring the risks of MasterCard International Incorporated, its affiliates and subsidiaries.
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