Why would a captive choose to domicile in Connecticut?
An insurance market on the doorstep, and a code that has been moved recently
Fenhua Liu makes an ecosystem argument rather than a price one. Connecticut calls itself the insurance capital of the world, and her case rests on what that means practically: a deep pool of actuaries, accountants, captive managers and brokers, and a large population of insurers already in the state that can front and reinsure captive business. She adds what the state has changed recently, naming pro captive legislative work over the past five years, a tax credit for licensed captives, and a low fee.
The talent argument is the one worth taking seriously, because a captive is only as good as the people around it. Liu points to professionals with insurance and risk management backgrounds already working in the state: actuaries, CPAs, captive managers, brokers and other service providers.
She then makes the harder point, which is about capacity rather than advice. Connecticut hosts a large number of insurance companies with offices in the state, and those companies can provide the fronting and reinsurance a captive needs to write the programme it actually wants.
Key takeaways
Liu's case for Connecticut rests on the surrounding market: actuaries, accountants, captive managers and brokers already working in the state.
A large population of resident insurers can provide the fronting and reinsurance capacity a captive needs, which is capacity rather than advice.
She points to pro captive legislative changes over the past five years, a tax credit for licensed captives, and a pre application tool showing what can be licensed.
The second half of her answer is about what the state has done on purpose. She describes pro captive legislative changes over the past five years and credits the insurance commissioner with directing work to make the department easier to deal with, including an online tool that lets a prospective owner see what can be licensed and against what criteria before an application is filed.
That last detail is the practical one. Clarity before filing is what stops an application dying slowly, and it is the same thing Utah's director described from the other side when he said most problems get ironed out in conversation.
From the conversation
Fenhua Liu
Assistant Deputy Commissioner and Director of Captive Insurance, Connecticut Insurance Department
“we are located between New York City and Boston”
Transcript
Read the full transcript 8 turns
Hostwould you be able to tell us why a prospective captive owner, what are some reasons they would choose to domicile in Connecticut
Fenhua Liu? That's a good question. Connecticut has a very unique ecosystem, and it says, as insurance capital of the world, it has a lot of talents, a deep pool of talents, in professional insurance risk management backgrounds, for example, actuaries, CP
Fenhua LiuAs, capital managers, other service providers, brokers. Also, we have about 1,600 insurance companies. They have an office of business in Connecticut that can provide funding insurance coverage to captives. In addition to that, we have a very proactive legislative changes. We have made over the past five years
Fenhua Liu. We have a strong supporting commissioner who is very helpful since he took Josh Hirschman, since he joined us. The first action he took is to help guide us to update our website, and we also developed a new tool to guide all the public access to the website to figure out what can
Fenhua Liube licensed, what criteria they can meet or not, and then before they submit an application with us, so we have a more clarity and transparency. We also have a very low fee requirement, and we are very efficient and busy friendly. We also provide a very good tax credit for each captive, since it was the license here in Connecticut
Fenhua Liu. In addition to that, we have very experienced captive regulators and other traditional insurance regulators, lawyers, accountants at the department. So, all this can help the captive to get what they need, and we also, you know, we are located between New York City and Boston. We have a lot of convenient locations of big momentum to help
Fenhua Liucaptive
Fenhua Liuto survive in the state. In addition to that, we have a lot of collaborations in your tax companies, associations, and industry partners and communities. We have a lot of effort on ongoing collaborations to give captive more background and more environment to survive here. That
Citations
Sources
- Captive Insurance Regulation, Connecticut Insurance Departmenthttps://portal.ct.gov/cid/mission-and-divisions/captive-insurance
The views expressed are those of the featured guest, drawn from a recorded conversation, and reflect their own professional experience. Nothing on this page is insurance, tax, legal, or investment advice. Consult your own advisors about your specific situation.
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