Connecticut passes agency captive legislation

The Connecticut General Assembly has passed a bill that would allow licensed insurance agents to establish an agency captive insurance company to insure against risks covered by the policies they sell, subject to specified conditions.

SB 377 defines an agency captive as a captive insurers that is owned or controlled by licensed insurance agents or producers; only insures against risks covered by insurance policies sold, solicited, or negotiated through its owners or controllers; and does not insure against any risks covered by a health insurance plan.

The bill was passed on May 9 and after being signed by Connecticut Governor Dannel Malloy, will be effective July 1.

Under the bill, an agency captive in Connecticut must only insure against commercial policy risks placed by or through one of its owners or controllers.

The bill requires an agency captive insurer to have and maintain at least $500,000 in unimpaired paid-in capital and surplus.