The Florida Legislature has passed HB 1101, an omnibus insurance bill that has carried language to allow Florida to become a Captive Insurance domicile state. A captive insurance company is a business or a group of businesses that form their own insurance subsidiary to finance their retained losses in a formal structure.
Captive insurance companies are established with the specific objective of financing risks emanating from their parent group or groups. The adopted language would allow for captive insurance companies to provide commercial insurance only on their own risks and does not allow for captive insurance companies to provide workers compensation, health, homeowners, and private passenger auto insurance.
Florida’s captive insurance laws have been antiquated serving as a regulatory barrier to the formation of captive insurers in this state.
The newly adopted language would allow Florida to compete nationally with other states for captive insurance business. There are approximately 37 other states that have adopted legislation to allow for captive insurance companies.
Read more at: Tax Times blog