Alberta Introduces Captive Insurance Company Legislation

Earlier today, the Alberta government introduced legislation providing for the licensing and supervision of captive insurance companies in Alberta, becoming only the second province, after British Columbia, to permit captive insurers.

A captive is an insurance company established by a single shareholder or group of related shareholders, and which typically insures only the risks of that shareholder or group. Captives often then further transfer, or "reinsure", the risks to other traditional insurance companies inside or outside Canada. Historically, most Canadian captives have been formed in certain U.S. states, Caribbean jurisdictions or Bermuda, all of which have specific captive insurance legislation, and actively market themselves as preferred homes for captives. Only a few dozen captives have ever been formed in British Columbia.