Effective July 1, 2022, House Bill 5506 (the “Bill”) amends various provisions of Connecticut’s captive insurance laws. Notably, the Bill lowers the capital and surplus requirements for various types of captive insurers. In particular, regarding pure and branch captives, such requirements are reduced from $250,000 to $50,000. Regarding association, industrial insured, agency, and sponsored captive insurance company licensed as a special purpose financial captive insurer, such requirements are reduced from $500,000 to $250,000. Notwithstanding these reductions in capital and surplus requirements, the Bill permits the insurance commissioner to determine such an amount to meet a captive insurer’s policy obligations.
The Bill also creates a three-year look-back period, which waives any and all penalties in connection with an insured’s failure to pay non-admitted premium tax beginning on or after July 1, 2019 and ending prior to July 1, 2022. This look-back period is conditioned upon an insured, no later than June 30, 2023, either establishing a branch captive insurance company in Connecticut or transferring the domicile of its alien or foreign captive insurance company to Connecticut.
In addition, the Bill lowers the financial examination requirements from once every three years to once every five years, and authorizes the commissioner to waive the examination requirement for pure captives and branch captives of pure captives.
Finally, the Bill amends various definitions. Specifically, the Bill creates a definition for “foreign captive insurance company” and includes the licensed foreign captives under the definition of “branch captive insurance company.”
The full text of the Bill is available here.
Visit our Insurance & Reinsurance Blog for the latest news and developments.Visit the blog
Sign up for our newsletter and get the latest to your inbox.