Connecticut Gov. Ned Lamont has signed a bill designed to strengthen the insurance industry in the state by, among other things, allowing inmates to accept and transfer risk through parametric contracts.
The law enters into force on 1 October.
Public Act 23-15 (also SB 1038), which introduces several changes to Connecticut’s captive insurance laws, will increase support and flexibility for captives, owners and service providers, according to a statement from the Connecticut Department of Insurance.
The parametric coverage provision under the new law provides companies with a more efficient and tailored approach to mitigating risks that are difficult to insure in the commercial market, the department said.
The new law also provides greater flexibility for protected cells by allowing them to create separate accounts to meet the specific needs of businesses.
This structure aligns with the risk management needs of cell participants and ensures that assets and liabilities within each account are protected, the department said.
The law also allows captives who have ceased doing business and have no remaining debt to apply for a certificate of dormancy that will exempt owners from paying Connecticut̵7;s minimum premium tax.
The exemption reduces the financial burden on owners during inactive periods and means captives can be reactivated when market conditions or insurance needs change, the department said.