Forming a Captive Insurance Company
in the State of Connecticut

BACKGROUND: The Legislature of the State of Connecticut passed legislation in 2008 that allows for the creation of captive insurance companies, regulated by the state’s insurance department.  The law was amended in 2011 as CGS 38a-91bb to refine the original law. In 2012, the State of Connecticut Insurance Department established a captive division and licensed the first two captive insurers.
Formation and Approval Process
Below is a summary of the basic steps typically followed for obtaining a Certificate of Authority for a captive insurance company (applicant), from the State of Connecticut Insurance Commissioner (Commissioner).  Depending on the nature and circumstances, additional steps and/or interaction/approval of other regulatory agencies may be needed to complete the approval processes. Some captive structures and programs, such as association, sponsored or special purpose vehicles (SPVs) may require additional steps, information and discussion, prior to or throughout the application process.
The Commissioner may retain legal, financial and examination services from outside the Insurance Department for licensing and financial oversight of a captive insurance company and the reasonable cost may be charged against such company.
Phase I:
  1. Conduct a “pre-feasibility” business analysis to determine if a captive insurance company is the right tool for the management of your company or group's risk management and insurance program.
  2. Select the necessary captive insurance company professional service providers from the list of firms previously reviewed by the State of Connecticut.  These reviewed service providers can be engaged to provide the following professional services:
    • Captive management
    • Legal
    • Accounting by a Certified Public Accountant (CPA)
    • Actuarial
    • Investment Manager

      Professional service providers not previously reviewed may submit an Application for Review to the Connecticut Insurance Department for consideration so as to offer opinions and render services.  The Insurance Department will not approve the use of any service provider unless they have been reviewed and approved for use by the Insurance Department.
  3. Arrange a meeting, including your captive manager, with the captive insurance regulator and staff to discuss the proposed captive and obtain initial reactions from the department. 
    • In the case of association or risk retention group captives, the Commissioner will want to meet with key officers prior to licensing.
    • A Risk retention group captive should have a feasibility study for this meeting.
  4. Select the name of the captive and ensure that it does not conflict with other names.
Phase II: Once conceptual understanding of the prospective captive insurance company strategy and program has been achieved
  1. Prepare documents necessary for incorporation, “draft” copies of which must be included in the Captive Application for Admission (See 2, below).  The services of a Connecticut legal counsel are appropriate for completing this process.
  2. Prepare and submit the State of Connecticut Captive Application for Admission (Application), including the listed documents and the necessary supporting documents/exhibits for the application to the Insurance Department.  A copy of this application is contained on the web site.
  3. Submit an original and one (1) complete copy of all materials in number 2. above to the Commissioner of Insurance for review.
    • All applications must be signed and notarized prior to submittal.
    • Include an $800.00 application fee.
    • The applicant may be required to submit an additional copy(s) of the application to the reviewer.
  4. Complete the incorporation process for the approved captive insurance company with the Connecticut Secretary of State (See separate application and approval process)
  5. Obtain the Certificate of Authority from the Captive Division of the State of Connecticut Insurance Department.
  6. A resident of the State of Connecticut must be designated as:
    • Licensed Agent
    • One Member of the Board of Directors
  7. With respect to financial requirements:
    • Establish accounts with a bank located in the State of Connecticut.
    • Capitalize the captive insurance company as per the approved Business Plan and Application.
    • Assure that if a Letter of Credit (LOC) is used for meeting capital and surplus requirements, the LOC is in a format approved by the Commissioner.  A sample LOC is available on this web site.
Phase III: Once the captive has received its Certificate of Authority:
  1. Submit a $375.00 annual license fee to the Connecticut Insurance Department.
  2. The Insurance Department may perform an organizational exam shortly after issuing the Certificate of Authority. The cost of this examination will be borne by the applicant.
  3. Captives are subject to examination by the Commissioner every 3 years.  The commissioner may extend examination to 5 years if certain management, operational and internal audit practices and completed.
  4. Annual Board of Director Meetings must be held in the State of Connecticut.
  5. All material changes must be submitted to the Commissioner of Insurance, prior to implementation.
  6. Submit required reports:
    • License Renewal and fee due on or before March 1, of each year;
    • Premium Tax Filing and Payment due on or before March 1, of each year;
    • Annual Report due on or before March 1, of each year.  (Verified by oath of two (2) executive officers); and
    • Audited financial statements due on or before April 1, of each year.
Please direct all inquiries and questions to:
Fenhua Liu
Director – Captive Insurance Division
Connecticut Insurance Department
P.O. Box 816
Hartford, CT 06142-0816
Office Location:
153 Market Street
7th Floor
Hartford, CT 06103
Telephone:  860-297-3935