Lone Star state welcomes three captives
The Texas Department of Insurance has welcomed one new captive and two redomesticated captives to the state as Texas opens its doors to the captive concept.
Texas’ new legislation was authored by Senator John Carona and sponsored by Representative John Smithee and removes regulatory barriers that had forced captives to be headquartered outside of the state.
Commerce Way Insurance Company has been approved to establish a new captive in the state and CART Assurance Company and Prize Indemnity are both redomesticating to the state.
Commenting on developments, commissioner of insurance Julia Rathgeber said: “Our state is now open for business for captive insurers seeking to move to Texas or to set up new operations here,”
“The statute has provided for a safe and stable entry of a new type of risk transfer mechanism into the state.”
Senator Carona added: “This legislation will reduce the cost to businesses relying on out-of-state captive insurance companies.”
“It will also provide incentives for companies to form or redomesticate pure captive insurance companies in Texas.”
New captive legislation for the state requires that affiliated companies have significant operations in Texas in order to form or move a captive here. Captives licensed in Texas can only insure operational risks of affiliated companies and controlled unaffiliated business; the statute prohibits captives from accepting insurance policy risks of an insurance affiliate.