A bill, proposed in the state House of Representatives on 21 March, is currently making its way through the legislature and is in the hands of the economic development, banking, insurance and commerce committee.
According to the proposed bill, a captive will have to cease collecting premiums and notify the insurance commissioner of its intention to go dormant. It must possess and maintain unimpaired capital and surplus of $25,000.
The bill includes a provision that would require a dormant captive to pay an increased renewal fee of $25,000 in its sixth year of dormancy, and $5,000 for every subsequent year, unless it proves it has a good reason for not transacting but remaining in existence for more than five years.
The Delaware legislature considered introducing a dormant status for captives last year, getting as far as the House, but the bill did not receive a vote in the Senate before the legislative session ended in July.
Arkansas and Montana introduced legislation proposing a dormant status for captives last month.
Vermont expanded dormancy to sponsored and industrial insured captives last year, allowing them to waive premium taxes but stay in the state, ready to be reactivated.