Andrew Mais, state insurance commissioner, State of Connecticut
The licenses granted by the state were for both new captive formations and the re-domestication of some captives to Connecticut from other domicile states. Since licensing the first captive in 2012, Connecticut has seen strong growth in the number of captives over the past two years, from 16 to 35 in 2021. Currently, one-third of all Connecticut captives are owned by Fortune 500 companies.
The state stressed that these newly licensed captive insurers primarily cover risks where insurance is not available in the commercial market or is too expensive. Some companies also increased self-retained risks and put them in their newly formed captive. The captives were formed to insure or reinsure some traditional lines with increased pricing due to the hardening market, or some new risks that are not covered or hard to be placed through commercial markets.
It also noted that the risks covered may be associated with changes to the laws related to employment and working conditions, increased reporting obligations, increased mobility of labor, volatile climate change, or rapid technology changes.
Insurance Commissioner Andrew Mais said: “This was another exceptional growth year for Connecticut-domiciled captives as businesses leveraged them to strengthen their insurance coverage, fill gaps and reduce risk. Our flexible and responsive regulatory services and the knowledgeable service providers and regulators in the insurance capital of the world will continue to draw companies to call Connecticut home.”
Fenhua Liu, Assistant Deputy Commissioner, Captive Insurance Division, added: “Captive insurers are growing in popularity. They allow businesses of all disciplines to control costs while better protecting their assets and reinvesting those savings back into their business operations. When a business can better control its costs, it can better control its destiny.”
According to Commissioner Mais, the record growth reflects the growing awareness of the high value a captive domiciled in Connecticut can provide, in large part due to the concerted efforts of the Department and various stakeholders. Connecticut Insurance and Financial Services, the National Network of Accountants, the Connecticut Captive Insurance Association, AdvanceCT, and the Department of Economic and Community Development, along with captive service providers and captive owners all helped to expand Connecticut’s presence and reputation as a top captive domicile state. Additionally, the National Network of Accountants’ ongoing outreach and education initiative called Reimagining Business Insurance is credited for six of the new captives formed by out of state companies.
Connecticut Insurance Department, Approval, License, Captive, Insurance, Reinsurance, Andrew Mais, Fenhua Liu, North America