January 27, 2021
Captive insurers are insurance companies that are controlled by the company, group, public entity, or individual they insure. They can provide a less costly way to manage risk. Current law in Washington does not recognize captive insurers as a distinct form of self-insurance that is different from commercial insurance. The Office of the Insurance Commissioner has begun an effort to subject captive insurers to insurance premium taxes.
If Washington is going to regulate captive insurers, it should do so along the lines of the new, bipartisan SB 5315 (which is similar to E2SSB 6331 from 2020). Such a bill would increase state revenues while not making captive insurance so costly as to negate its benefits.
Read the report.Categories: Publications , Tax Policy.