OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
SB-1038
AN ACT CONCERNING CAPTIVE INSURANCE COMPANIES.
Primary Analyst: CW 3/31/23
Contributing Analyst(s): MP
Reviewer: MM
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 24 $ FY 25 $
Department of Revenue Services GF - Revenue
Loss
15,000 15,000
Insurance Dept.; Revenue Serv.,
Dept.
GF - Potential
Revenue Gain
Minimal Minimal
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill, which exempts dormant captive insurers from the insurance
premiums tax, results in a General Fund revenue loss of $15,000
annually beginning in FY 24.
1
The bill also allows captives to accept or transfer risk through
parametric contracts and allows sponsored captives to take certain
actions related to their protected cells. These changes are anticipated to
make the state more attractive as a domicile for captives. There are 45
captives currently in Connecticut.
To the extent the bill increases the number of captive insurance
companies that are established in Connecticut, the bill could result in a
General Fund revenue gain associated with the following for each
1
According to the Department of Insurance, there are currently two dormant captive
insurers in the state each paying the minimum tax of $7,500. 2023SB-01038-R000384-FN.DOCX Page 2 of 2
captive:
1. Application fee: $800
2. Fee for initial license: $375
3. Annual license renewal: $375
4. Insurance premiums taxes.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future.
Sources: Department of Insurance