New Law Enhances Risk Management Options and Reinforces State’s Commitment to the Captive Insurance Sector
HARTFORD, Conn. – Connecticut has taken another step to solidify its standing as a competitive domicile for captive insurance companies with the signing of Public Act No. 25-130, “An Act Concerning Captive Insurance.”
Governor Ned Lamont signed the bill into law earlier this month following its passage by the Connecticut legislature. The new law, announced by Connecticut Insurance Department (CID) Commissioner Andrew N. Mais, becomes effective October 1, 2025, and introduces expanded operational options for captive insurers doing business in the state.
“With the signing of Public Act No. 25-130, Connecticut shows its continued commitment to maintaining a business-friendly and competitive environment for captives,” said Commissioner Mais. “We understand the evolving risk management needs of businesses, and these updates, combined with the state’s expertise and focus on innovation, reinforce Connecticut’s position as a leading domicile for captives.”
A captive insurance company is an insurer wholly owned and controlled by one or more businesses to cover the risks of its owners. Connecticut’s captive insurance sector has seen measured growth in recent years, driven in part by ongoing regulatory modernization efforts.
Key Provisions of Public Act No. 25-130
The legislation introduces several notable changes to the state’s captive insurance statutes:
- Conversion to Protected Cells: Allows all types of captive insurers—such as pure captives, sponsored captives, agency captives, and others—to convert into protected cells with CID approval.
- Transferability of Protected Cells: Enables sponsored captive insurers, with proper consent, to sell, assign, or transfer protected cells and their associated assets and obligations to another sponsored captive.
- Rehabilitation Tools for Insolvent Cells: Authorizes the Insurance Commissioner to isolate insolvent protected cells and restructure them into new protected cells or standalone captives, while preserving their assets and obligations.
“These updates demonstrate our commitment to giving businesses greater flexibility and practical tools to manage risk,” said Fenhua Liu, Captive Division Director at the Connecticut Insurance Department. “By listening to industry needs and adapting, we help ensure Connecticut remains a trusted and forward-looking home for captives of all sizes.”
Building on Recent Captive Insurance Reforms
Public Act No. 25-130 continues a recent trend of pro-captive legislation in Connecticut. Earlier reforms have:
- Enabled the use of parametric risk transfer contracts;
- Reduced minimum capital requirements based on the nature of the risk; and
- Allowed protected cells to convert into standalone captives.
These ongoing efforts underscore the state’s emphasis on regulatory flexibility, innovation, and responsiveness to market demands.
