Connecticut Governor Signs Legislation Updating State's Captive Laws

Connecticut Governor Ned Lamont has signed legislation updating the state's captive insurance laws to support the growth of captive insurance in Connecticut and increase options for captive owners.

A statement from the governor's office said the measure, which becomes effective October 1, offers increased support and flexibility for captive insurance companies, their owners, and service providers.

Among other things, the newly enacted legislation, Public Act 23-15, allows Connecticut captives to accept and transfer risks through parametric contracts, providing the state's captives another tool for covering unique risks or those that are difficult to place in the traditional commercial market.

The legislation also provides greater flexibility for sponsored captive protected cells by enabling them to establish separate accounts to address businesses' specific insurance needs. According to the state, the change provides a solution that aligns with the unique risk management needs of cell participants while ensuring the protection of assets and liabilities within each account.

The newly signed measure also provides benefits for owners of dormant Connecticut captives. Captives that have stopped doing business and have no remaining liabilities can apply for a certificate of dormancy, exempting them from the requirement to pay Connecticut's minimum premium tax. The state said the exemption not only reduces inactive captives' financial burden but also allows those captives to be reactivated easily when market conditions or insurance needs change.

"With the signing of P.A. 23-15 Connecticut reaffirms its commitment to maintaining a supportive and competitive captive insurance landscape," Andrew Mais, commissioner of the Connecticut Insurance Department, said in the statement. "The new legislation, combined with the state's recognized expertise, competence, and innovation, solidifies Connecticut's position as a premier domicile for captives."