New Connecticut captive law offers more opportunity
Amendments to Connecticut’s captive insurance law will take effect from 1st of October, 2014 after governor Dannel P Malloy signed SB 188 into law.
The Connecticut Department of Insurance (CDOI) has been considering proposed amendments since March in a bid to make the north-eastern domicile more attractive.
As a result, captives are now eligible to utilise Connecticut’s re-domestication statute meaning bringing foreign-based captives to the state is more straightforward.
The amendment also gives the Connecticut insurance commissioner the power to allow captives to take credit for reinsurance ceded to reinsurers that do not regularly qualify for credit in the state.
The third major change narrows the applicability of the Holding Company Act to captives formed as risk retention groups and gives the commissioner the authority to ensure compliance with the act by pure captives and industrial insured captives.
“After having been passed unanimously by both houses of the General Assembly, Governor Malloy’s enactment of SB 188 should reinforce the message that Connecticut intends to be a progressive partner in helping businesses control the cost of risk and better manage their capital,” says Thomas Hodson, president of the Connecticut Captive Insurance Association.
The statute also includes a significant expansion of the types of coverage that can be written by branch captives in the state, granting them more flexibility in their offerings.
Hodson concludes, “For over 200 years, Connecticut has been an innovator in risk management, so these updates to the existing captive law are a natural continuance of that innovation."