An Act Concerning Captive Insurance Companies.
The implications of SB00188 on state laws are significant, as it amends various sections of the general statutes concerning captive insurance. Notably, the bill allows companies from other states to become domestic captive insurance companies in Connecticut, provided they comply with new organizational and licensing requirements. This could potentially attract more insurance companies to the state, promoting local economic growth and making Connecticut a more competitive location for captive insurance. The effective date for many of the changes proposed in this bill is set for October 1, 2014.
SB00188, also known as the Act Concerning Captive Insurance Companies, seeks to modify existing regulations related to the establishment and operation of captive insurance companies in the state. The primary aim of this bill is to enhance the ability of captive insurance companies, which are typically formed by parent organizations to insure their own risks, to operate within Connecticut's legal framework more effectively. This includes changes to licensing requirements and the types of risks that can be insured, specifically prohibiting captive insurance companies from offering personal risk insurance for certain categories such as motor vehicles and homeowners.
The sentiment surrounding the bill appears to be supportive among those advocating for a stronger captive insurance framework, notably within the insurance industry and regulatory bodies. Proponents argue that these changes will create a more favorable business environment and stimulate the state's economy by attracting more industry players. However, there could be some criticism concerning the potential risks involved if proper safeguards are not maintained, particularly with changes to the regulatory environment.
One notable point of contention arises from the bill's restriction on captive insurers from providing personal risk insurance coverage. Critics may view this limitation as a potential hindrance to the flexibility of captive insurers in addressing specific needs of their parent organizations. Furthermore, the ability for out-of-state companies to become domestic captives may raise questions about local oversight and regulatory control, leading to concerns about the adequacy of consumer protections within the state.