From the newest to the oldest domiciles, at least half a dozen states are amending their captive insurance laws to increase their appeal to current and potential sponsors.

States that have made major changes include Georgia, which slashed premium taxes paid by captives; Tennessee, which opened the door for captives to write workers compensation risks; and Montana, which now allows public-sector entities in the state, such as cities and counties, to form captives.

Regardless of whether the changes are major or relatively minor, the motivation among the 30 states with captive laws is the same.

“There is a healthy competition, as states want to be sure they don't lose business to other states,” said Brady Young, president and CEO of captive manager Strategic Risk Solutions Inc. in Concord, Massachusetts.

“Lawmakers are always looking to make their captive statutes a little more user-friendly vis-a-vis their competitors,” said Tom Jones, a partner at McDermott, Will & Emery L.L.P. in Chicago.

For example, Georgia lawmakers approved and sent to Gov. Nathan Deal legislation that would slash premium taxes paid by captives.

Under current law, captives pay the same 4.75% tax rate as commercial insurers. But under the proposal before the governor, Georgia's captive tax rate would be cut to 0.4% on the first $20 million in premiums and 0.3% on premiums above $20 million. In addition, the measure would cap the maximum premium taxes paid in a year at $100,000.

State lawmakers “are trying to make Georgia friendlier to captive sponsors. Until now, Georgia never has been able to compete with other domiciles,” said Ellen Charnley, a managing director in the San Francisco office of Marsh USA Inc.'s captive solutions practice.

Georgia had just nine captives at year-end 2014, down from 13 the prior year.

But with the changes to the state's captive statute, “The future is very exciting,” said Anton Hayward, a partner with Bennett Thrasher L.L.P. in Atlanta.

In Tennessee, which revamped its captive law in 2011 and saw its captives more than double to 72 last year, Gov. Bill Haslam recently signed a law making it easier for captives to cover workers compensation risks and provide more flexibility in meeting capitalization and surplus requirements.

“This legislation gives us the tools we need to make workers compensation captives a viable option for local employers,” Michael Corbett, Tennessee's director of captive insurance in the state's Department of Insurance and Commerce in Nashville, said in a statement last week.

In Montana, the changes to the state's captive law, which include allowing Montana public entities to set up captives and clarifying that captives can be established as limited liability companies, are “meaningful improvements” to the state's law, Montana Captive Insurance Association President John Jones said in a statement.

In Oklahoma, in what state regulators call “cleanup” legislation, lawmakers are considering a measure that would make clear that captives can write primary workers compensation coverage, not just excess coverage.

In Texas, which enacted captive legislation in 2013 and had 12 captives at the end of last year, lawmakers are expected to pass legislation this session that would allow captives to accept and cede risks to captive reinsurance pools or to an affiliated captive.

In addition, the legislation would allow the captive to pay, with regulatory approval, dividends to those holding an equity interest in the company-owned insurer.

“These are good and important things,” said Josh Magden, president of the Texas Captive Insurance Association in Austin and vice president of consultant relations at Sage Advisory Services Ltd. Co. in Austin.

In the relatively new domicile of North Carolina, lawmakers are considering a bill that would allow the state insurance commissioner to determine the amount of capital and surplus needed for special-purpose captives and the authority to exempt a captive from filing its annual report.

“A considerable amount of work would be saved,” said Martin Eveleigh, chairman of the North Carolina Captive Insurance Association and chairman of Atlas Insurance Management in Charlotte, North Carolina.

In Vermont, a recent law reduces the number of individuals required to sign a captive's incorporation papers from three to one.

“It is not a major thing, but it does make the incorporation process that much less burdensome,” said David Provost, deputy commissioner in the Captive Insurance Division of the Vermont Department of Financial Regulation in Montpelier.

Just having an attractive captive law isn't enough to win new captives. A state's regulatory climate is important, experts say.

“There has to be a commitment by the state and to have experienced regulators who know what they are doing,” said Strategic Risk Solutions' Mr. Young.