Arizona set to update captive insurance framework

A number of updates to Arizona’s captive insurance regulatory framework will come into force on September 26, 2025.

Arizona HB 2193 (Chapter 145, Laws 2025) has been described as a major update to the state’s captive insurance regulatory framework. Law firm Kutak Rock worked with stakeholders and policymakers to help secure codification of this legislation.

Some of the highlight changes include the creation of a new “dormant captive insurer” designation, available to captives that have ceased issuing policies and have no outstanding liabilities. Dormant captives may apply for a Certificate of Dormancy, valid for up to five years, with renewals permitted.

Another is lower capital requirements for Protected Cell Captives (PCCs). The change reduces the minimum capital and surplus requirement for protected cell captives from $500,000 to $250,000. Kutak Rock suggested this lower financial barrier to entry will encourage innovation and growth in Arizona’s captive market.

The renewal process has been streamlined. Captive insurers must now submit annual license renewal fees between July 1 and September 1, aligning timing requirements, which simplifies administrative compliance.

Finally, to reflect the prevalence of LLC-structured captives, the new law includes several amendments to reflect that LLC-structured captives are governed by a board of managers rather than a board of directors.

Kutak Rock said: “With the passage of HB 2193, Arizona has further modernized its captive insurance laws, creating new flexibility for existing captives, lowering capital barriers for protected cell structures, and clarifying governance and compliance requirements. These changes make Arizona an even more attractive domiciliary jurisdiction for captive insurers, balancing growth opportunities with strong regulatory oversight.”

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