7 May 2014Law & regulation

Connecticut a final step away from captive law modernization

Public Act No. 14-6, which would amend Connecticut’s captive insurance law, has passed both the Connecticut state senate and House of Representatives, and is on its way to governor Malloy’s desk for signature.

Among other changes, reported upon previously, the act modernises Connecticut’s captive law by:

  • Streamlining the procedure for redomesticating foreign captives to Connecticut by making Connecticut’s redomestication statute applicable to captives;
  • Granting the Connecticut insurance commissioner discretion to allow captives to take credit for reinsurance ceded to reinsurers not otherwise eligible for credit for reinsurance purposes in Connecticut,and;
  • Narrowing applicability of the holding company act to captives formed as risk retention groups, and authorizing the commissioner to require compliance with the holding company act by pure captives and industrial insured captives under certain limited circumstances.

The act, which would take effect October 1st, 2014, follows 2012 amendments to Connecticut’s captive law that expanded the types of permissible captives and created a tax credit for new captives, among other changes.

The third annual symposium on captive insurance in Connecticut is scheduled for September 17th, 2014, where a number of industry representatives will convene in attempts to emphasize Connecticut’s continuing efforts to attract new captive insurers to the state.