Connecticut has proposed an update to its legislation that would require the insurance commissioner to study the operations of micro captives.
The bill, introduced on 22 February, also aims to promote Connecticut’s captive insurance industry and increase the tax incentive for captives domiciling in the state
It proposes requiring the insurance commissioner to study the operations of micro captive insurers, including an examination of their methods to ensure that they have sufficient capital to operate and provide services to small business in the state.
Other proposed changes include increasing the amount of non-refundable tax credit that a captive can claim to $15,500, against the aggregate tax imposed for the first calendar year in which the company has tax liability, provided that the credit does not reduce the tax to less than zero.
According to the bill, the commissioner of revenue services will provide the form and manner in which the tax credits may be claimed and is set to come into effect on 1 January 2018.
The bill also aims to promote captive insurance in the state with an injection of funds, which is set to kick in from 1 July of this year.
The Department of Economic and Community Development, in collaboration with the Connecticut Insurance Department and the Connecticut Captive Insurance Association, will utilise the money transferred to collaborate with other entities and promote the state's captive insurance industry.
