The Connecticut Captive Insurance Association (CCIA) has revealed Governor Ned Lamont’s plans to amend the current captive insurance legislation to introduce new tax incentives for captives that establish or redomicile in the state, as well as other innovative “risk-based” regulatory changes.
The proposed amendment plans to provide a “positive incentive” for captive insurance companies insuring risks in Connecticut but domiciled in other jurisdictions, to return and open a new foreign branch captive insurance companies and begin paying premium taxes in the state. It also reduces up-front capital requirements for pure/branch captives, amends the definition of “association captives” and makes other technical changes.
The CCIA board of directors suggested that these proposals “will increase captive formations and speed-to-market in Connecticut by reducing the need for unnecessary start-up cash on hand, reducing on-going administrative costs, and providing captive owners relief from the tax on premiums placed directly with unauthorised insurers”.
The board explained that the changes will produce “a positive economic benefit to Connecticut via increased captive formations and premium writings in the state. They will help bring revenue back to Connecticut from other states which collect premium taxes on these Connecticut-based companies’ risks”.
In the announcement, the board said: “We strongly believe these important changes will result in Connecticut having one of the most innovative captive statutes in the country and will help to generate new premium tax dollars for the state”.