On February 5th, Connecticut Governor Ned Lamont delivered a series of proposals to legislators, including an act ‎concerning captive insurance companies that aims to expand the captive insurance industry, incentivizing captives ‎to relocate to Connecticut.    ‎

In hopes of attracting firms to Connecticut, the Governor’s initiative seeks to lower capital and surplus requirements ‎for pure captives, from not less than $250,000 to $50,000, unless the Commissioner determines that a higher ‎minimum amount is required for such captive in order to meet its policy obligations.   Additionally, capital and ‎surplus may be in the form of any asset approved by the Commissioner.  ‎

The proposal also includes a three-year look-back for the payment of taxes owed plus interest in addition to a ‎waiver of ‎penalties on outstanding liabilities for Connecticut insureds who establish a branch captive in Connecticut ‎or re-‎domicile a foreign or alien captive to Connecticut prior to July 1, 2021. ‎Each new captive insurance company established in Connecticut generates annual premium tax, ranging from a ‎minimum of $7,500 to a max of $200,000 a year.  By easing regulatory constraints and offering incentives, the ‎Governor estimates that the proposal will generate $7.5 ‎million in FY 2021.‎  ‎

The Governor’s proposed initiative does request additional funding, which would be provided to allow the ‎department to ‎grow regulatory and service provider expertise through staff development, access to industry specific ‎journals and ‎guides, and section advisory panel support.  ‎Additional proposed changes include, the frequency of financial examinations for captives decreasing to at least ‎one every five years instead of every three years, the Commissioner may waive the necessity to conduct a financial ‎exam on pure captives every five years, and captives are not required to hold an annual board of directors meeting ‎within the state.  ‎

Please click here to view the Agency Legislative Proposal.  Please click here to view the FY 2021 Recommended Budget.