Commissioner Andrew Mais of the Connecticut Insurance Department announced a 37% increase in the state’s captive insurance sector in 2023.
According to Mais, this growth includes the addition of 10 new captive insurers and 13 new cell risk-bearing entities.
With a current total of 78 net gain of captive entities, this is the fourth consecutive year of net growth since 2020.
Connecticut’s approvals in 2023 included new insurers and the relocation of existing captive insurers to the state. The influx of new businesses choosing Connecticut for their captive programs has notably increased this year, according to Mais.
These captives predominantly issue policies to cover risks retained by businesses due to the unavailability or high cost of commercial coverage. Example risks include commercial auto liability, general liability, workers’ compensation, contractual liability, climate risk, business interruption, mechanical breakdown, employment practices liability, reputation risk, cyber-attacks, and other environmental, social and governance risks.
Last year Connecticut updated its captive insurance law to provide more flexibility for established captive cells and allow captives to accept and transfer risk using parametrics. The legislation also provided tax benefits for owners of dormant captives. The legislation went into effect on October 1, 2023,
“With recent pro-captive legislation, increased staffing, internal support, and collaborations across the state, Connecticut continues to attract global captive insurers and service providers, further establishing itself as a premier domicile and solidifying our title as the insurance capital of the world,” Mais stated.
The number of U.S. captives continues to rise, although the growth of captive formations was tempered by the pandemic, as well as ongoing scrutiny from the IRS and greater regulatory and reporting requirements.
Since licensing the first captive in 2012, Connecticut saw the number grown from 16 in 2020 to 35 in 2021. For 2022, Connecticut ranked 13th among states that license them with 57, according to the Insurance Information Institute.
On April 16, 2024, the Connecticut Insurance Department, in collaboration with businesses and state agencies, will present the first Connecticut Captive Insurance Forum.
Topics Carriers Connecticut
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