An Act Concerning Captive Insurance.
HB 6433, Public Act 25-130, revises Connecticut’s captive insurance statutes and expands the legal framework governing how captive insurers may be organized, operated, and restructured. The bill updates statutory definitions for multiple captive insurance forms, including pure captives, agency captives, association captives, industrial insured captives, risk retention groups, sponsored captives, branch captives, and special purpose financial captive insurance companies. It also clarifies the treatment of securities, surplus notes, protected cells, participant contracts, and related reinsurance and securitization arrangements.
A major feature of the bill is the creation of new authority for certain captive insurers to convert into protected cells, and for sponsored captive insurance companies to sell, transfer, assign, or convey protected cells to another sponsored captive insurer or special purpose financial captive insurer with regulatory approval. The bill also strengthens and reorganizes rules for protected cell accounting, asset segregation, insolvency handling, creditor recourse, and commissioner oversight, while preserving the separateness of cell assets and liabilities. It further narrows the general applicability of the insurance title to captive insurers, except for specified provisions that remain applicable.
The act amends Connecticut General Statutes sections governing captive insurance companies, effective October 1, 2025, and adds new section 3 addressing conversions of captives into protected cells and transfers of protected cells. It changes the legal structure of captive insurance operations by expressly authorizing conversions, transfers, and continued existence treatment for protected cells, while preserving assets, rights, obligations, and liabilities through those transactions. It also reinforces the statutory segregation of protected cell assets from other cells and from the sponsored captive’s general account, and it clarifies when creditors may reach particular assets. These changes primarily affect captive insurers, sponsors, participants, reinsurers, and the Insurance Commissioner’s approval and oversight authority.
The bill appears to have been broadly supported and noncontroversial. It received unanimous or near-unanimous votes in committee and on the House and Senate floors, with no recorded opposition in the provided vote history. The lack of committee transcript material suggests no significant public debate is captured here, and the voting pattern indicates general agreement that the bill modernizes and clarifies the captive insurance framework.
No notable opposition is reflected in the available materials. The main policy issues embedded in the bill are technical rather than partisan: how much flexibility captive insurers should have to convert into protected cells, transfer protected cells between entities, and use separate accounts, versus the need for commissioner approval, asset segregation, and creditor protections. Any potential concern would likely center on regulatory oversight, insolvency treatment, and the protection of policyholders and creditors, but the vote history suggests these issues were resolved without recorded dissent.