Louisiana passes bill to modernise captive insurance regulations
The Louisiana State Legislature has passed House Bill 635 (HB635), ushering in reforms to the state’s captive insurance framework. The bill, which now awaits Governor Jeff Landry’s signature, aims to streamline regulatory requirements, reduce capital thresholds, and introduce new company categories to encourage growth and innovation in the captive insurance sector.
HB635 retains the core structure of existing law but introduces several key modifications. Notably, it redefines terms such as “captive insurance company” and introduces new classifications including “branch captive insurer”, “risk retention group”, and “affiliated reinsurance company”.
The legislation lowers capital requirements significantly. Pure captive insurance companies will now need a minimum of $250,000 in capital and surplus—down from $500,000—while association captives must hold $500,000, reduced from $1 million. New requirements for branch and risk retention groups have also been set at $250,000 and $1 million respectively.
Other major updates include a shortened policy form approval period from 45 to 30 days, expanded definitions to allow both stock and non-stock incorporations, and enhanced provisions for redomestication, allowing insurers to relocate in or out of Louisiana more easily.
Taxation has also been restructured. Captives will now pay a premium tax rate of 0.15% with scaled deductions, replacing the prior tax model aligned with domestic insurers. Furthermore, dormant captive insurers—those no longer active but retaining no liabilities—can now apply for a certificate of dormancy.
To promote transparency and oversight, the bill mandates periodic financial reporting, conflict of interest disclosures, and regular audits. It also preserves confidentiality protections while enabling data sharing with out-of-state regulators under strict conditions.
With these changes, Louisiana is seeking to position itself as a competitive and flexible jurisdiction for captive insurance formation and operations in the United States.
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