Connecticut Lawmakers Approve Measure Updating State's Captive Statute

Connecticut lawmakers have given final approval to legislation to update the state's captive insurance statute.

Under the bill, S. 1038, dormant captives will be exempt from paying the minimum premium tax, said Fenhua Liu, director and assistant deputy commissioner of the Connecticut Insurance Department's Captive Insurance Division.

In addition, protected captive cells will be able to establish and maintain separate accounts and transfer risks through a parametric product.

Also under the measure, captive insurance companies will be allowed to accept and transfer risks through parametric contracts.

Connecticut, which licensed its first captive in 2012, has had major captive growth. At the end of 2022, Connecticut had 45 captives, up from 35 in 2021 and just 16 in 2019. Those 45 captives generated $768.1 million in gross written premiums in 2022, up from $700.7 million in 2021 and just $300 million in 2018.