Oregon shall license its first captive insurance companies in January 2013. Although Oregon may not have decades of regulatory experience it does enjoyed both a clean slate. Oregon, without cumbersome legacy issues, established a captive domicile with an enhanced combination of streamlined regulatory access and lower frictional costs.

Oregon remains one of the top states to do business in. Effective July 2012 with the business climate in Oregon got more friendly to captive owners, service providers and those that would like to be by establishing Oregon as a captive domicile state.

Portland remains one of our country's best kept secrets that enjoys a vibrant downtown, a resource rich surrounding metro area and a unique mix of hospitality, commerce and lifestyle. The Portland International Airport is consistently rated the best in the nation and is ten minutes from the heart of a vibrant downtown Portland.

Oregon looks to be the clear new – best option to either domicile or re-domicile captive insurance companies. The Department of Consumer and Business Services and its Insurance Division look to make the captive insurance industry an important part of Oregon's business landscape.

Here is an overview of Oregon taxes and captive insurance:

Corporation Excise Tax

  • Captive insurance companies who are part of a consolidated federal return must file as part of the Oregon consolidated return. Any transactions between the captive insurance company and the parent or any member of the consolidated group will be eliminated in filing of the excise tax return for Oregon.
  • Generally, any deduction allowed on the federal consolidated return after eliminations required for consolidated reporting are allowed on the Oregon return. Due to the complexity of tax law, you should seek advice from a qualified tax and legal professional to understand how a captive insurance company could affect your tax situation.
  • Questions about the corporation excise tax? E-mail corp.help.dor@dor.state.or.us or phone 503-378-4988


  • Oregon does not impose a premium tax on captive insurers.
  • Captives are subject to property tax on any property owned by the captive insurer.
  • The fee for obtaining a certificate of authority to transact insurance as a captive insurer is $5,000 for the year the director first issues the certificate of authority. The fee must be paid when an application for a permit to organize is submitted. Otherwise, the fee must be made with the captive insurance company application.
  • The fee for an annual renewal of a certificate of authority is $5,000, due by Dec. 31.
  • A captive insurer is required to pay the expenses and charges of an examination.

What Due Other
Annual statement March 1  
Management discussion/analysis March 1 Due with annual statement
Actuarial opinion March 1  
Excise tax return April 15 (for calendar year filer) Filed the Oregon Department of Revenue
Audited financial statement June 30  
Certificate of authority renewal December 31  
Biographical affidavit (each executive officer or director) Within 30 days of any change to an officer or director  
Canflict if interest statement for officers, directors, key employees Annually Filed with insurer board of directors


Captive Insurer Forms

Providor Forms

  • Placement on Approved Captive Insurer Management Firm List - 440-4936: fillable form or pdf
  • Application to Certify Loss and Expense Reserves for Captive Insurers - 440-4945: fillable form or pdf
  • Authorization as an Independent Certified Public Accountant for Captive - 440-4946: fillable form or pdf

  To reduce or stabilize insurance costs
Financing risk in a captive makes sense for a smaller, more homogeneous group of insured businesses with more favorable claims experience than the broader insurance market. Captives may benefit from other cost savings through lower premiums, elimination or reduction of broker commissions, and lower administrative cost.

To increase capacity for offer tailored products and access to reinsurance
Businesses insured in the traditional market are limited to coverage, deductibles, and limits offered by insurance companies, a "one size fits all" mentality. In some cases, needed coverage is not offered or is cost prohibitive. Conversely, companies may not be able to properly finance desired insurance coverage, deductibles, and limits under a self-insurance arrangement because they cannot access the reinsurance market. A captive can access the reinsurance market and has the flexibility to tailor products for a specific insured.

To control insurable risks
Traditional insurers are subject to the cycles of hard and soft insurance markets. During hard markets, insurance coverage is more limited and prices are higher. A captive is less susceptible to these fluctuations and offers the insured more control over underwriting and claims settlement activities.

To establish better-than-average claim experience
A company with a favorable claims history may be a prime candidate to establish a captive to avoid subsidizing other insured businesses with less favorable claims experience. Also, captive companies put greater emphasis on controlling claims costs since they benefit directly.

To capture investment income and accelerate/manage cash flow
Their is a difference in the timing of when the insurer receives premiums and when claims are paid to the insured. Because of this difference, premiums collected are invested and reserved until claims are paid. Corporate systems retain the benefit of investment earnings on premiums paid; under the traditional market, this benefit is forfeited to an independent third-party insurer.

Safety and soundness for risk management programs
The captive insurance market is more formalized than self-funding insurance risk and has a regulatory framework to support the captive (for example, a requirement for annual audits and actuarial opinions on adequacy of reserves). This may provide a higher probability (whether perceived or real) of success. Alternatively, the formalized framework still allows for insureds to work within a flexible environment to meet unique and specific needs.

  How does your claims experience compare to the average?
If your company's claims experience is better than average, current premiums paid to a traditional insurer are probably higher than necessary and you may want to consider a captive. In other works, you are probably subsidizing the higher risks of other insured businesses and could potentially benefit from lower premiums in a captive. Costs to operate a captive (including fronting and reinsurance costs) usually comprise about 35 percent to 40 percent of captive premium. Given this general guideline, if your current claims experience is less than 60 percent to 65 percent of total premium paid, you should take a closer look at the captive option.

Is your current claims experience consistent and predictable?
Captives work best for programs that have predictable losses. The more predictable and consistent the losses, the greater the confidence with which premiums and reserves can be set for the captive program. Volatile lines of coverage can be problematic for captives as they are difficult to quantify. Also, lines of coverage with short claims development patterns can also be problematic as the ability to hold reserves against potential future losses is limited.

How well do you know your insurable risks and which risks would you like to move from the traditional market?
Before considering a captive, an organization must have a good understanding of its insurable risks. A captive may make sense for one risk but not another. There is nothing that says an organization must insure all of its risks in a captive, if established. However, the organization must be able to identify those risks for which it makes sense and there must be sufficient premium volume from those risks to support a captive operation.

If you have a good understanding of your insurable risks and you believe there is a more cost-effective way to address those risks, you should consider a captive.

How much do you currently pay in premiums?
A minimum level of premium volume is required in captive programs to provide stability, absorb the operating costs of the captive, and provide a return on the capital invested. Generally, to make a captive program viable, an organization should have at least $750,000 in annual premium for a pure captive.

What are the demographics of your risks (e.g., international, national, or Oregon only)?
The demographics of your risks may make a difference in your risk management or portfolio. You will need help from qualified risk managers, a captive manager, accountants, and attorneys to determine the best options for your company.

What is the financial stability of the parent organization?
An insured considering a captive will need sufficient financial resources to support the capital investment and the posting of collateral behind the captive program.

Are you willing to commit to the captive as an alternative to the traditional market?
Captives are a way for companies to reduce reliance on the commercial market and provide stable, long-term risk financing. Captives will not be the lowest cost option in all years, so to be successful, they will need to be committed to the process long term. Short-term premium savings should not be the overriding reason for starting a captive. Generally, an organization should be willing to commit at least three to five years to a captive arrangement.