The Arkansas House of Representatives has passed a captive bill that proposes to revise certain provisions related to the formation and operation of captive insurance companies.
The bill, introduced on 8 February, was passed by the house on 21 February and is now awaiting the final senate vote.
The proposed changes include the introduction of an incorporated protected cell. The bill states that an incorporated protected cell “means a protected cell that is established as a corporation or other legal entity separate from the sponsored captive insurance company or producer reinsurance captive insurance company”.
Arkansas currently licenses producer reinsurance captives, pure captives, branch captives, association captives, sponsored captives, special purpose captives and industrial insured captives.
The proposed bill also welcomes a dormant status for captives, which is defined as a pure captive insurance company, sponsored captive insurance company, or industrial insured captive insurance company that has ceased transacting the business of insurance, including the issuance of insurance policies, and has no remaining liabilities associated with insurance business transactions or insurance policies issued before the filing of its application for a certificate of dormancy.
In addition, the bill includes minor text and language changes.