Yesterday the Senate unanimously passed 2SSB 5315, which would subject captive insurers to the 2% premium tax. We wrote about the issue in a policy brief earlier this year. Captive insurers are insurance companies that are controlled by their insured. Companies may use captive insurers for several reasons, including to improve risk management, to fill gaps in insurance coverage, and to take advantage of federal tax benefits.

The fiscal note for the bill estimates that it would increase revenues to the general fund–state by $34.2 million in 2021–23 and by $4.7 million in 2023–25.

As we noted in our brief, the bill “would increase state revenues while not making captive insurance so costly as to negate its benefits.”