Delaware Captive Annual Report Changes
Aaron Hillebrandt

Delaware Captive Annual Report Changes

Newly Updated Annual Reporting Requirements for 2014

Aaron Hillebrandt November 24, 2014 Posted in: Blog Posts, Captives, Insurance / Insurers

Delaware has updated its annual reporting requirements for captives. There are now two versions of the Annual Report due March 1 of each year, one for Pure Captives and Series Business Units (SBUs) only, and one for all other types of captives.

The “all other” version is similar to the prior year’s Annual Report. Some changes include:

  • a requirement to submit expected-scenario proforma financial statements with a 3-year time horizon if the time horizon covered by the previous set of proformas has expired,
  • a clarification that taxes on the income statement must be federal income taxes incurred, and
  • a requirement that each line of business be reported separately. Previously there was an “All Other Lines” group covering lines other than Auto Liability, General & Products Liability, Professional Liability, Other Liability, and Workers Compensation on a consolidated basis.

The Annual Report for Pure Captives and SBUs contains the above changes but also some additional simplifying changes, including:

  • the removal of the 13 actuarial triangle sheets showing loss development for each line,
  • a clarification that unpaid losses and loss adjustment expense (LAE) should be reported on a direct and assumed basis, and
  • the removal of several questionnaire items addressing topics such as discounting of losses, retroactive reinsurance, financial insurance/reinsurance, and the writing or assuming of unaffiliated or uncontrolled business. Related to this last item, premium and reinsurance reporting is no longer segmented by controlled vs. non-controlled business.
Also for Pure Captives and SBUs there was an Annual Report instruction document published including guidance such as stating a requirement for SBUs that each Core and SBU file separate annual reports; no combined basis report is required.

Along with the Annual Report instruction document, Delaware has published instruction documents for Audited Financial Statements and Statements of Actuarial Opinion (SAO) due June 30 each year. As an actuarial service provider to numerous Delaware-domiciled captives, Pinnacle has already incorporated these SAO requirement changes into our processes.

The annual filing requirements can be found here:

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