On July 16, 2024, the Connecticut Division of Insurance coverage (the “Division”) issued a press launch saying that Governor Ned Lamont has signed Public Act No. 24-138, “An Act Regarding Insurance coverage Market Conduct and Insurance coverage Licensing, the Insurance coverage Division’s Technical Corrections and Different Revisions to the Insurance coverage Statutes and Captive Insurance coverage”, (the “Act”) into regulation. Based on the Division, the Act furthers Connecticut’s dedication to the captive insurance coverage trade, and the “new laws underscores Connecticut’s dedication to fostering a business-friendly regulatory setting that promotes innovation and helps the expansion of captive insurance coverage corporations.”
Efficient October 1, 2024, the Act permits “[a]ny sponsored captive insurance coverage firm, together with a sponsored captive insurance coverage firm licensed as a particular function monetary captive insurance coverage firm…upon utility…and with the [insurance] commissioner’s prior written approval, convert a number of protected cells or integrated protected cells….” Conn. Uncodified H.B. 5503 § 15(a). Protected cells of a sponsored captive insurance coverage firm can convert into a brand new captive, reminiscent of a “sponsored captive…particular function monetary captive…pure captive…danger retention group…company captive…industrial insured captive…[or] affiliation captive….” Conn. Uncodified H.B. 5503 § 15(a)(1). Furthermore, the Division states that, below the Act, “[b]usinesses initially insured by a protected cell can now type a brand new captive and convert their belongings, advantages, obligations, and liabilities from the protected cell into the brand new captive [and t]his conversion happens with out affecting the belongings, rights, advantages, obligations, and liabilities of the protected cells.”
Lastly, the Division is of the view that the Act “builds on the legislative achievements of 2022 and 2023, which included modifications reminiscent of permitting captives to just accept and switch dangers by parametric contracts, decreasing minimal capital necessities primarily based on danger profiles, and waiving examinations for well-governed pure captives [and t]hese efforts have positioned Connecticut as a number one domicile for captive insurance coverage, providing progressive options and elevated flexibility for captives.”
