Bill: HB 1944, 85(R) - 2017

Bill Caption

Relating to captive insurance companies. 

Fiscal Notes

No significant fiscal implication to the state is anticipated.

Bill Analysis

HB 1944 would make a series of changes to the Insurance Code regarding captive insurance companies with five provisions to take note of.  First, a captive insurance company would now be permitted to issue life insurance to insure employee benefits that are subject to the Employee Retirement Income Security Act. Next, a captive insurance company may cede risks to or take credit for reserves on risks ceded to a non-affiliated re-insurer.  Third, a captive insurance company would be exempt from the requirement to file an actuarial report with the annual report if the company has less than $1 million of net written premium or reinsurance assumed or has been in operation for less than 6 months of the end of the previous calendar year. Fourth, a captive insurance company would not be required to use a licensed adjuster to adjust losses. Finally, conditions for the establishment of captive exchanges would be established.

Vote Recommendation Notes

Reinsurance is a highly regulated industry practice where insurers pass financial risk to another insurance company to protect against large losses. HB 1944 strengthens the ability of insurers to form reinsurance agreements by reducing certain regulations and allowing captive exchanges for reinsurance. With the reduction of burdensome regulations on reinsurance, insurers will be able to write more large scale insurance policies. We support this bill. 

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