The Connecticut General Assembly has passed a new bill authorising agency captive insurance companies in the state.
SB 377 authorises the incorporation and operation of an agency captive, an insurer that is owned by an insurance agent or agency and only insures against risks covered by insurance policies sold, solicited or negotiated through the insurance agency or producers that own the captive.
The bill, which was passed on 9 May and has been sent to Governor Dannel Malloy’s office to be signed, is effective 1 July 2018.
Under SB 377, agency captive insurers abide by three main requirements. Firstly, it must insure against only commercial policy risks placed by or through one of its owners or controllers.
Upon the request of the insurance commissioner, it must submit to her the commercial policies it covers.
Finally, it must not insure the risks of any health policy or plan.
Stephen DiCenso, president of the Connecticut Captive Insurance Association (CCIA), explained that alterations were made to the original bill following the reaction from healthcare organisations in Connecticut.
He explained: “There was a change made to the original bill following was some reaction within the State of Connecticut from healthcare organisations that were not as comfortable with it.”
“They had some considerations which they didn’t think the bill addressed but that was removed so the bill so it no longer addressed healthcare captives.”
According to DiCenso, the CCIA were in support of the bill and hoped it could bring increased captive business to the Constitution State.
“Connecticut has a number of insurance carriers that write agency captive business already and use other domiciles, so, we do hope that there will be some level of redomestication.”
He concluded: “The expertise is here and the location is great and now that we have the authorisation for agency captives we think there will be some activity.”
