The latest captive domicile in the United States, Iowa, has passed Bill 2636, which reduces the tax burden for captives writing premiums above $40m and $60m.
Iowa’s tax on captive premiums written above $60m has been reduced to 0.02%, down from the original 5%.
Captive premiums written above $40m will be now taxed at 0.045% by the State rather than 5%.
The Bill maintains the tax rate of 0.02% on the first $20m of premium and 0.125% on the following $20m.
Iowa has dedicated captive insurance regulators, and the Insurance Division has a captive insurance bureau to carry out its obligations.
Current Iowa legislation allows companies to form pure, association, protected cell, special purpose and industrial insured captives in the jurisdiction.
Captive Intelligence published an article in June highlighting that Iowa is likely to become the next US state to embrace captives, which would make it the thirty-sixth US jurisdiction to adopt captive insurance legislation, including the District of Columbia.