The 2014 tax increase on captives in Illinois is one step closer to being repealed after legislation was passed by the state’s Senate in a unanimous vote on 15 May.
The bill, 1286, proposes to lower the captive premium tax, dedicates a percentage of tax revenue to be used for appropriate regulation and reduces some filing fees.
Introduced by senator John Mulroe on 9 February, the bill proposed changes include setting the minimum capital requirements at $250,000 for pure captives, $500,000 for industrial insureds and $750,000 for association captives.
Under the amendments, captives would be able to use multiple forms of capital and surplus, including US currency, letters of credit, Illinois state bonds and US bonds.
In addition, the amendments make changes to the reports a captive must submit, and allow the annual report to be filed at a fiscal year end, rather than on, or prior to, 1 March. They also propose allowing captive reinsurance pools in Illinois.
