Substitute House Bill No. 6433, also known as Public Act No. 25-130, revises the laws governing captive insurance in Connecticut by repealing Section 38a-91aa and introducing new definitions and provisions. The bill clarifies the types of captive insurance companies, including "agency captive insurance companies," "association captive insurance companies," and "branch captive insurance companies." It specifies that agency captive insurance companies can only insure risks covered by policies sold through their controlling agents and prohibits them from insuring health insurance risks. Additionally, the bill introduces terms such as "industrial insured," "controlled unaffiliated business," and "insurance securitization," aiming to modernize and enhance the regulatory framework for captive insurance companies, effective October 1, 2025.

The bill also focuses on sponsored captive insurance companies, detailing the management of protected cells, which are separate accounts for managing assets for participants. It establishes that liabilities from other insurance businesses cannot affect the assets of a protected cell and requires consent for asset transfers between cells. Furthermore, it mandates separate accounting for each protected cell and annual financial reporting to the commissioner. A significant provision allows for the conversion of an insolvent protected cell into a new protected cell of another company, ensuring the continuity of its assets and obligations while protecting creditor interests. Overall, the bill aims to provide clearer guidelines and protections within the captive insurance sector in Connecticut.

Statutes affected:
Raised Bill:
INS Joint Favorable Substitute:
File No. 63:
Public Act No. 25-130: