New Connecticut captive law signed
Connecticut Insurance Department (CID) Commissioner Andrew Mais has announced that Governor Ned Lamont has signed into law Public Act No. 24-138, “An Act Concerning Insurance Market Conduct and Insurance Licensing, the Insurance Department's Technical Corrections and Other Revisions to the Insurance Statutes and Captive Insurance”.
According to the CID this new legislation underscores Connecticut’s dedication to fostering a business-friendly regulatory environment that promotes innovation and supports the growth of captive insurance companies.
“With the signing of Public Act No. 24-138, Connecticut continues to uphold a supportive and competitive landscape for captive insurance,” said Commissioner Mais. “We recognise the evolving insurance and risk management needs of businesses, and our recent legislative advancements, combined with the state's expertise and innovation, reinforce Connecticut's position as a premier domicile for captives.”
Public Act No. 24-138, effective October 1, 2024, introduces additional flexibility for captive insurance companies. Protected cells of sponsored captive insurance companies can convert into a new captive, such as sponsored captives, special purpose financial captives, pure captives, risk retention groups, agency captives, industrial insured captives, and association captives.
Businesses initially insured through a protected cell can now form a new captive and convert their assets, benefits, obligations, and liabilities from the protected cell into the new captive. This conversion occurs without affecting the assets, rights, benefits, obligations, and liabilities of the protected cells. This flexibility meets the evolving risk management and insurance needs of businesses, providing protected cells the ability to seamlessly convert into a new captive.
“This new law allows our growing captive insurance industry to expand even more. Other sections of the law strengthens the Insurance Department's response to, and investigation of violations of state insurances laws as well as re-defining 'small employer' for insurance purposes.” said State Senator Jorge Cabrera, Co-chair of the Insurance and Real Estate Committee. “All in all, these are positive advancements for Connecticut where we have the highest concentration of insurance jobs in the nation.”
“I’m proud to be part of Connecticut’s unique environment where the legislature, regulators, and industry are working cohesively to create a strong and robust atmosphere for the captive insurance industry to thrive,” said State Representative Kerry Wood, Co-chair of the Insurance and Real Estate Committee. “Our committee has been actively engaged in encouraging innovation and growth in this sector which is a result of this legislation.”
Public Act No. 24-138 builds on the legislative achievements of 2022 and 2023, said the CID, which included changes such as allowing captives to accept and transfer risks through parametric contracts, reducing minimum capital requirements based on risk profiles, and waiving examinations for well-governed pure captives. These efforts have positioned Connecticut as a leading domicile for captive insurance, offering innovative solutions and increased flexibility for captives.
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