Connecticut Senate Bill SB00321

Connecticut 2024 Regular Session

• Introduced: 2/29/24
• Refer: 2/29/24

Caption

An Act Concerning Captive Insurance And The Conversion Of Protected Cells.

Impact

The proposed changes will significantly impact how captive insurance companies operate, potentially streamlining processes for participants. The bill seeks to clarify the rights and protections associated with converted cells, ensuring that such conversions do not compromise existing assets, rights, or obligations. This legislation reflects a growing acknowledgment of modern business needs and the desire to have more adaptable insurance solutions while fully complying with established regulations.

Summary

SB00321 aims to modify provisions related to captive insurance companies in Connecticut, specifically focusing on the conversion of protected cells within these companies. A protected cell is a discrete account maintained to fund liabilities associated with a specific participant in a captive insurance arrangement. The bill allows for the conversion of one or more protected cells into either a new protected cell, incorporated protected cell, captive insurance company, or risk retention group. This provides flexibility for insured entities to better structure their insurance needs while maintaining essential protections for their assets.

Contention

Notable points of contention may arise over how these conversions might affect the financial stability and regulatory oversight of captive insurance companies. Some stakeholders could argue that loosening restrictions around captive structures might lead to increased risk in the insurance market, while proponents highlight that such adjustments are necessary for responding to changing market dynamics. Discussions around the protections afforded to policyholders and the overall implications for state regulations governing captive insurance operations could generate significant debate.