The Texas Captive Insurance Association (TxCIA) is keen to see legislation that would allow cell and group captives to be formed within the domicile, sources have told Captive Intelligence.
The Lone Star State first introduced captive legislation in 2013 with 13 captives formed by the end of 2014.
In November 2022 there were more than 72 captives domiciled in Texas and premium totalled $10.4bn in 2021. Captive Intelligence is awaiting year-end domicile figures for 2022.
“We are looking at a bill to expand that and we’re working with a lobbyist to draft legislation,” said Houston-based Andrew Marson, managing director at Strategic Risk Solutions and a TxCIA board member.
“We’re looking to change the law to make it possible to form group captives and cell captives to make Texas on par with a lot of the other domiciles around the country.”
Other sources noted that they were lobbying the state to also introduce branch captive legislation, but that it may take time for any potential new legislation to come to fruition.
“The state is open to a lot, but it’s just the bandwidth of having the personnel to help push things out,” the source added.
Currently, those wishing to form a captive in the state only have the ability to form single parent or pure captives.
Despite excitement about the potential for group and cell captive legislation, some sources speaking to Captive Intelligence were hesitant about the potential for branch legislation.
“I’m not a fan of the branch captive legislation for Texas, because I think that the branch captive legislation would just give a lot of savvy taxpayers and risk professionals the ability to reinsure outside of Texas’s borders,” one consultant said.
“If I’m Mississippi, for example, I want branch legislation because no one’s going to stay there. But if I’m Texas, I don’t really want it because I don’t want to be a conduit to someone else’s economic development.”