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Member, Beacon International Group, Ltd.
Texas Gov. Rick Perry signed a bill into law that allows the formation of pure captive insurance companies in Texas.
The measure the governor signed into law on Monday takes effect Sept. 1. The Texas Legislature
Under Texas’ captive law, captives may insure only the operational risks of the parent company and its affiliates and the risks of controlled unaffiliated businesses.
Texas captives also would be allowed to reinsure coverage of affiliates’ or controlled unaffiliated businesses’ operational risks that the captive is allowed to insure directly, as well as employee benefits offered by affiliates, required liability insurance, and workers compensation and employers liability coverage.
The law sets the captive premium tax at 0.5% with an annual minimum tax of $7,500 and an annual maximum of $200,000.