Oklahoma Insurance Department Celebrates First OK Captive Day Success

The Oklahoma Insurance Department (OID) hosted its inaugural OK Captive Day at the Embassy Suites Downtown Medical Center in Oklahoma City on August 20. The event drew nearly 200 registered attendees from across the captive insurance industry in Oklahoma. 

The conference featured comprehensive sessions that delved into various aspects of captive insurance, including the history of the industry, key case studies, and the specific advantages of selecting Oklahoma as a captive domicile. Steve Kinion, Director of Captive Insurance for the OID, provided an in-depth presentation that underscored Oklahoma's increasing prominence in the captive insurance landscape. 

"I am thrilled by the turnout and reception of our first OK Captive Day," Oklahoma Insurance Commissioner Glen Mulready said. "Oklahoma is becoming a leader in the captive insurance industry, and this event underscored our commitment to fostering a robust environment for captive insurers." 

Mr. Kinion highlighted Oklahoma's growth in the captive insurance sector. In 2023, Oklahoma experienced a 34 percent increase in captive premiums, and the state saw a net gain of 14 new captive insurers, bringing the total number of licensed captives to 59 by the end of the year. The types of captives licensed in Oklahoma as of August 16, 2024, include 1 association captive, 1 protected cell captive, 2 sponsored captives, 3 series captives, 4 entity protected cell captives, 14 special purpose captives (includes 2 series LLC core), 30 pure captives, and 1 dormant captive. 

Moreover, Mr. Kinion's presentation detailed the fiscal impact of the captive insurance sector in Oklahoma. The state's captive insurance program generated $796,527 in gross revenue in the fiscal year 2024. After deducting $500,000 allocated to various state funds, the net captive tax and fee revenue was $290,348.35. These funds significantly support the Oklahoma Firefighters Pension and Retirement Fund, the Oklahoma Police Pension and Retirement System, and the state's General Revenue Fund. 

Mr. Kinion said that captives are insuring diverse risks such as cyber risks, cannabis-related risks, and terrorism-related risks. These areas represent emerging markets where traditional insurance might fall short, and captive insurance can offer tailored coverage. For example, public entities in other states have used captives to cover earthquake risks, cyber liabilities, and property exposures. Mr. Kinion emphasized that similar strategies could be adopted by Oklahoma's public entities to manage their specific risk exposures. 

Mr. Kinion also highlighted the advantages of Oklahoma's captive insurance tax structure. Oklahoma domiciled captives benefit from a low premium tax rate of 0.2 percent for direct premium (capped at $100,000) and 0.1 percent for reinsured premium (also capped at $100,000). Additionally, captives with 25 or more employees in Oklahoma pay no more than $50,000 in taxes regardless of the amount of premium written, providing significant tax savings compared to the 2.25 percent premium tax rate for commercial insurers. 

"OK Captive Day was a resounding success and provided a space for stakeholders to come together, exchange ideas, and explore the potential captive insurance can hold for businesses," said Mr. Kinion. "We look forward to continuing to build momentum in our captive sector." 

For more information on captive insurance in Oklahoma, visit captive.oid.ok.gov or contact Steve Kinion at (918) 704–8136 or [email protected].