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New Public Law Paves the Way for Multiple Corporate Captive Insurance Companies in FSM

Palikir, Pohnpei (FSM Information Services): December 17, 2009 - President Mori has signed into law Congressional Act No. 16-17 and paved the way for a new type of Captive Insurance Company to come to the FSM. The law, Public Law 16-17, amends Title 37 (Insurance) of the Code of the FSM by including a definition of a new type of Captive Insurance Company, the Multiple Corporate Captive (MCC) Insurance Company, and also provides for the issuance of Captive Insurance Managing licenses.

Since Captive Insurance Companies are new to the FSM, the laws are still new and are being updated as needs arise. The Executive Branch saw the need to update Title 37 and sent up legislation to Congress in September of 2009 during the Second Regular Session. On December 8, 2009, Congress passed the bill in its entirety during the Second Special Session. A copy of the original bill can be viewed on the FSM Congress website at: http://www.fsmcongress.fm/pdf%20documents/16th%20Congress/Bills/C.B%2016-48.pdf.

The new additions effectively define what a Multiple Corporate Captive (MCC) Insurance Company is and provide for the licensing of Captive Insurance Managing licenses. The law now states that MCC's are one or more corporations who are organized, or have the intent to organize, as a group of corporate captive insurance companies under the laws of the FSM and defines the laws that they must operate under. It also sets forth how Captive Insurance Manager's licensing will be issued by the Commissioner or the Insurance Board.

In his transmittal letter back to Congress, President Mori thanked the Congress for their immediate passage of the Act. The President stated that this will be another opportunity for the FSM to reap the anticipated substantial revenue from the captive insurance program that both branches of government have continued to diligently work hard to progress and succeed in the FSM.