Connecticut has updated its captive insurance regulations under a new law aimed at expanding risk management options for business.
Governor Ned Lamont signed Public Act No. 25-130, “An Act Concerning Captive Insurance,” into law, introducing structural changes to how captives can operate in the state. The legislation was announced by Connecticut Insurance Department (CID) Commissioner Andrew Mais.
Captive insurance companies, which are formed and controlled by businesses to insure their own risks, are a growing component of the insurance sector. The new law, effective October 1, 2025, modifies the state’s regulatory framework to allow more flexibility in the formation and operation of these insurers.
Key provisions include allowing various types of captives, including pure, sponsored, special purpose financial, agency, industrial insured, and association captives, to convert into protected cells with the Insurance Commissioner’s approval.
The law also permits sponsored captives to sell, transfer, or assign a protected cell, along with its assets and obligations, to another captive, subject to regulatory consent. In cases where a protected cell becomes insolvent, the Commissioner is authorized to restructure it into a new protected cell or a standalone captive without altering its obligations.
"With the signing of Public Act No. 25-130, Connecticut shows its continued commitment to maintaining a business-friendly and competitive environment for captives," said Commissioner Mais. "We understand the evolving risk management needs of businesses, and these updates, combined with the state’s expertise and focus on innovation, reinforce Connecticut’s position as a leading domicile for captives."
Fenhua Liu, director of the CID’s Captive Division, said the changes are designed to give captive insurers more operational tools to manage risk.
"These updates demonstrate our commitment to giving businesses greater flexibility and practical tools to manage risk," Liu said. "By listening to industry needs and adapting, we help ensure Connecticut remains a trusted and forward-looking home for captives of all sizes."
Public Act No. 25-130 builds on prior legislative changes in the state, including authorization for captives to enter parametric risk transfer contracts, adjustments to minimum capital requirements based on exposure, and the ability for protected cells to become standalone entities. The updated framework aims to support the insurance sector’s use of captives in evolving risk environments.
