Captive Insurance Market to be Established in Connecticut
Hartford, Connecticut has been known as the nation’s insurance capital since the 18th century, a legacy Governor Dannel Malloy seeks to reinvigorate by drawing captive insurance companies into the state. Following the lead of several other states, Governor Malloy’s recent budget proposal seeks to establish and staff a division within the Insurance Department to regulate captive insurers. To draw captives to Connecticut, the state legislature approved a $7,500 tax credit for the first taxable year a captive insurer is domiciled in-state. Additionally, state regulations were modified to model those in Vermont, which has attracted captive insurers for over thirty years, to avoid barriers to attracting captives. Although the state’s insurance rules have permitted captive insurers since 2008, these are the first actions taken to entice boutique captive insurers to domicile in Connecticut. Although there are currently no captives in Connecticut, marketing efforts and resources such as the Connecticut Captive Insurance Association are likely to make the nation’s insurance capital an attractive option for captive insurers.