Texas governor Greg Abbott has signed the state’s new captive bill into law.
A Texas captive insurance company can now be formed as a reciprocal insurance exchange, and take credit for reinsurance ceded to a non-affiliated reinsurer when specific requirements are met.
Captives are also able to insure life insurance benefits for employee benefits subject to the Employee Retirement Income Security Act, and hold capital and surplus in the form of Texas county or municipal bonds.
In addition, the new captive bill authorises the insurance commissioner to waive the requirement to provide an actuarial report with the captive’s annual filing if certain conditions met, and eliminates the requirement that the captive must have a licensed claims adjuster if the claims are limited to first-party claims of the parent and/or affiliates of the captive.
The Texas Captive Insurance Association worked closely with the legislature, the Texas Department of Insurance and other parties to update the state’s captive legislation for the second time since 2013.
