The Texas Department of Insurance (TDI) has adopted new rules implementing provisions of the Texas Insurance Code that remove regulatory barriers for captives. The new rules go into effect on April 27, 2014.
These rules implement Insurance Code Chapter 964 which was enacted under Senate Bill (SB) 734. The provisions of Chapter 964 went into effect June 14, 2013 and, along with the new rules, address the application process and the registration of captive managers, among other things.
Prior to enactment of the law, captives were forced to be headquartered outside of the state. However, as noted by Insurance Commissioner Julia Rathgeber subsequent to its implementation, “[Chapter 964 supports] economic development efforts in our state by allowing companies already doing business here to locate their captive insurance operations within our borders.”
TDI is currently accepting re-domestication applications for captive insurers with existing track records as well as accepting registrations for captive managers. Applications for new captive operations will be accepted at a later date.
As cited in the register for the rule proposal, “[t]he proposed sections are flexible enough to accommodate the various structures, risks, and management approaches for captive insurance companies while also meeting the statutory requirements that captive insurance companies must be financially stable, maintain adequate reserves to service the risks that they insure, and retain experienced management to make success of the entity probable.”
To see a copy of the newly-adopted rules, click here
For TDI’s post discussing the implementation of SB 734, click here