Captive insurance companies may now be domiciled in Texas under
a law signed by Gov. Rick Perry on Monday. Texas joins more than 30
other states that permit the formation and operation of various
types of captive insurance companies. The law provides a
straightforward means for companies with significant operations in
Texas to form their own captive insurance companies, or to
re-domesticate existing captive insurers that were formed out of
state.
The law permits a captive insurance company holding a Texas
Certificate of Authority to collect premiums and write insurance
for its parent and its other subsidiaries and affiliates, as well
as unaffiliated controlled businesses. The bill allows captives to
underwrite various types of insurance for these affiliated and
unaffiliated controlled companies, and then seek reinsurance to
offset a portion of these risks. Licensure requirements include,
among other things, "significant operations" in Texas, an
annual board meeting,
