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February 26, 2021

CT’s insurance ‘captive’ count jumped in 2020

Photo | Contributed CID Commissioner Andrew N. Mais

Connecticut’s captive insurance industry just had one of its largest growth years since the state began licensing the entities, which are formed to provide property-casualty coverage for their corporate owners.

The Connecticut Insurance Department said Thursday that it licensed six new captives in 2020, which is a nearly 38% increase from the 16 that existed here at the end of 2019.

“Our long-term goal is for Connecticut to continue to grow its presence as one of the nation’s most attractive and well-respected states in which businesses can domicile their captive insurance companies,” CID Commissioner Andrew Mais said in a statement.

Mais credited the 2020 increase to outreach efforts by CID’s captive division, assisted by several industry groups such as the Connecticut Captive Insurance Association and the Connecticut Society of CPAs.

Connecticut began licensing captive insurers back in 2012, offering a $7,500 tax credit. The effort got off to a slow start, with just four relocating here by 2014.

However, captive relocations have picked up steam since then, partly with the help of additional friendly regulatory policies in the past few years, such as lowering the required capital threshold for captives to a level lower than Vermont’s, and allowing for “agency captives,” which are formed by insurance agents.

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