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Committee advances HB6433 on captive insurance; adds $15,000 fine and cell-conversion language
Summary
The Insurance and Real Estate Committee voted to send HB6433 to the floor with proposed substitute language that updates captive insurance definitions, adds a $15,000 fine for violations and allows certain protected-cell conversions.
The Insurance and Real Estate Committee on Thursday voted to send HB6433, concerning captive insurance, to the Joint Favorable Substitute (JFS) on the floor.
The measure, presented during the committee’s Feb. 20 meeting by committee leadership and staff, updates statutory definitions used to regulate captive insurance companies, imposes a fine of $15,000 for violations and adds language in section 3 allowing a captive insurer domiciled in Connecticut to convert protected cells without affecting the company’s assets, rights or benefits.
Terry Wood, cochair, summarized the bill as “an insurance department bill regarding regulation of the captive insurance industry.” LCO staff clarified that the fine in the substitute refers to the general fine identified as “38 a.” The staff described the change in section 3 as a small, targeted revision to permit certain transfers or sales of protected cells after specified protections are observed.
Nut graf: The bill would modernize aspects of how captive insurance companies are regulated in the state and introduce an explicit monetary penalty for violations. Supporters framed the changes as aligning Connecticut’s regulatory framework with other states to keep the domicile competitive.
Committee members asked for background on whether fines like this existed previously; LCO staff and committee presenters said they did not recall such a fine in last year’s captive bill and characterized the $15,000 penalty as new to this substitute. There was no further testimony reported in the transcript about industry opposition or fiscal estimates tied to the new fine.
The committee moved and seconded the recommendation to JFS. The clerk conducted a roll call vote; votes on the measure were recorded and the committee held votes open until noon, per the clerk’s announcement.
Ending: With the JFS recommendation approved in committee, HB6433 will move toward the House calendar for further floor consideration under the substitute language.
