Public Act No. 14-6
(the “Act”), which would amend Connecticut’s captive law, has passed both the Connecticut State Senate and House of Representatives, and is on its way to Governor Malloy’s desk for signature.
The Act modernizes Connecticut’s captive law by, among other changes: (i) streamlining the procedure for redomesticating foreign captives to Connecticut by making Connecticut’s redomestication statute applicable to captives; (ii) 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 (iii) narrowing applicability of the Holding Company Act to captives formed as risk retention groups, but 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 1, 2014, follows 2012 amendments to Connecticut’s captive law (reported here
) that expanded the types of permissible captives and created a tax credit for new captives, among other changes.
At Connecticut’s second Annual Captive Insurance Day at the Capitol April 15, 2014, representatives of the Connecticut Insurance Department, the Connecticut Captive Insurance Association, the Connecticut Department of Economic and Community Development, and the Connecticut General Assembly’s Insurance and Real Estate Committee emphasized Connecticut’s continuing efforts to attract new captive insurers to the State. The third Annual Symposium on Captive Insurance in Connecticut is scheduled for September 17, 2014.
Edwards Wildman serves as general counsel to the Connecticut Captive Insurance Association, and represented Thomson Reuters and Stanley Black & Decker in the formation of Connecticut’s first two captive insurers. We will continue to monitor developments on this topic and post updates at InsureReinsure.com.