Iowa has passed the House File 2636 bill that lowers the reinsurance tax rates imposed on some captive insurance companies' premiums.
Under the act, premiums written above US$60 million will be taxed at a rate of 0.02 per cent, instead of the five per cent rate that applied previously.
The legislation does not change the rates of 0.2 per cent for premiums of up to US$20 million and 0.125 per cent for premiums between US$20 million and US$40 million.
Previously, Iowa passed the Senate File 549 bill into law on 1 June 2023 to allow the formation of captive insurance companies in the state, which made it the thirty-sixth US jurisdiction to adopt captive insurance legislation.
The law authorised the formation of pure, association, protected cell, special purpose and industrial insured captives.
Minimum capital and surplus requirements are not less than US$250,000 for pure captives; and not less than US$500,000 for industrial insured captives, including risk retention groups, and for protected cell captive companies.
The Iowa Insurance Division is responsible for administering the law and promulgating its rules.
