Iowa’s Governor, Kim Reynolds
31 May 2023Analysis

Iowa poised to join list of US captive domiciles

Iowa is set to become the latest state to join the list of US captive domiciles.

On April 24, the Iowa Senate unanimously passed Senate File 549 (SF 549), as amended, “a bill for an act relating to captive insurance companies,” which the House passed earlier in April.

Iowa’s Governor Kim Reynolds is expected to sign the bill into law, making Iowa the thirty-sixth United States jurisdiction (including the District of Columbia) to adopt a captive insurance statute, as legal firm Womble Bond Dicksinson pointed out in a note on the Bill.

“Bills passed by the Iowa General Assembly and signed into law normally go into effect July 1 following passage unless otherwise specified. SF 549 does not specify an effective date, so it is expected to become effective July 1 of this year, bolstering Iowa’s robust insurance industry with a modern, competitive statute,” said the firm in the note.

“SF 549 is modern, well written and bears a strong resemblance to predecessor statutes from other jurisdictions. It authorizes the formation of pure, association, protected cell, special purpose and industrial insured captives, establishes regulatory reporting and examination requirements, provides a premium tax framework and charges the Iowa Insurance Division with the responsibility of administering the law and promulgating rules under it.

“Iowa will also have dedicated captive insurance regulators. The Insurance Division is expected to establish a captive insurance bureau to carry out its obligations under SF 549. The bureau will be staffed by three new full-time employees: a bureau chief, an examiner specialist and an examiner.”