Captive FAQs

How will the Texas captive law help businesses in Texas? 

Texas captive insurance law will encourage Texas based companies to form their captives in Texas, which will create jobs while increasing tax revenues and revenues generated by new business. Texas based companies with captives licensed elsewhere may well consider the advantages of re-domiciling their captive to their home state for tax purposes.

Does Texas intend to focus largely on in-state companies? 

The focus for the association will initially be on Texas based companies. Over time, the association hopes to expand the offerings to provide a welcoming domicile for all companies.

What kind of home state advantages will it offer? 

The principal advantage will be companies wrestling with NRRA issues. While these issues are by no means settled, the lack of certainty causes many captive owners to elect to be domiciled in their home state, regardless of the ultimate resolution. Over time, we know that Texas will demonstrate many additional advantages.

How will the addition of Texas as a captive domicile change the larger market?

Initially, we don’t see this addition as changing the larger market. That is not the intent of the legislation. We are helping Texas based companies and beginning the process of creating a viable domicile.

How does the state plan to differentiate itself?

Texas already has a business friendly environment with helpful regulations and regulators. The captive initiative is an extension of that culture. With no state income tax and overall encouragement to business, we think that the differences will be clear.

We regard the current legislation as the beginning of the process, not the end. We look forward to working with the Department of Insurance and the new Commissioner and all interested parties in the state as we continue to hone and perfect the legislation to the benefit of Texas.

For more information regarding the process of forming or redomiciling a Texas Captive Insurance Company, please visit: www.tdi.texas.gov/licensing/company/captives.html