Texas Reaffirms Captive Insurance Commitment with Dedicated Specialist

Unlike other states with captive enabling legislation, Texas has never had any regulatory staff fully dedicated to captive insurance. As a result, captive insurance responsibilities were distributed to various people in the Texas Department of Insurance (TDI). At the 2022 annual meeting of the Texas Captive Insurance Association (TxCIA), captive insurance stakeholders were dismayed to learn how staff shortages at the TDI were causing delays in the captive licensing process and other captive activities in the state.

In response, TxCIA pursued a special lobbying initiative for the 88th regular session of the Texas Legislature with a goal of adding a dedicated captive insurance specialist to the TDI staff. Through the sponsorship of Senator Charles Schwertner (R) and Representative Ed Thompson (R), the association achieved its objective, securing an appropriation directing the TDI to retain a captive insurance specialist to support captive insurance oversight and related activities in the Texas captive insurance market.

TDI recently announced the hiring of veteran captive specialist Robert Rudnai to fill the new captive specialist position. Mr. Rudnai and TDI's chief financial analyst, Amy Garcia, CFE, attended the recent annual meeting of TxCIA and briefed the attendees on their plans going forward. Mr. Rudnai (pictured) plans to perform a complete review of the captive process, seeking ways to streamline it.

Ms. Garcia reported on the scope of the captive industry in Texas. Currently, there are 76 captives in the state, with several more in the licensing process. She expects there will be over 80 Texas-licensed captives by the end of the year. While the number of captives is lower than in many other states, the amount of gross written premium flowing through Texas captives in 2022 was $11.7 billion, making the state the fifth largest in terms of premium volume, according to Ms. Garcia.

The 2023 TxCIA annual meeting was held on October 17 and 18 in Irving, Texas, and was attended by about 120 captive insurance owners, managers, fronting insurers, and service providers. Further showing the growth of the industry in Texas, this was the largest TxCIA meeting yet. Attendance in 2022 was 83, and there were only 70 in 2021.