NU Online News Service, April 1, 3:55 p.m.EDT

Marsh announced today that its captive management practice hasbeen recognized by the State of Connecticut Insurance Department asthe first firm eligible to provide captive management for captiveinsurance companies domiciled in the state.

Connecticut enacted legislation that became effective Jan. 1making the state a captive insurer domicile–one of about 30 in theU.S.

Marsh, which offers captive management services globally, is thefirst captive management firm to receive approval from theConnecticut Insurance Department.

Debra Korta, state legislative program manager, told NUOnline News Service in June 2008 that funding for the captivedivision–allowing for three positions including a captiveadministrator–would not be effective until this October, addingthat a hiring freeze is in effect, issued by Gov. Jodi Rell.

Connecticut spokesperson Dawn McDaniel told NU todaythat the freeze is still in effect with a contingency in place, butthat the fiscal year ends June 30, "and we'll see what happens withthe next fiscal year, once it goes through the budget processwithin our legislature."

Under Connecticut's new law–similar to captive statutes inVermont, the largest U.S. domicile–public and private businesses ofall sizes are permitted to own and operate a captive insurancecompany.

Marsh added that the state's new captive regulations offer anumber of incentives for businesses that locate their captiveinsurance companies in Connecticut, including low premium taxes andno premium tax on reinsured business.

The new law requires that a captive have no less than threeincorporators or three organizers, at least one who is a residentof the state. Connecticut also said it requires "unimpaired paid-incapital and surplus" of $250,000 for a pure captive; $750,000 foran association captive; $500,000 for an industrial insured; and $1million for a risk retention group. (NU Online News6/25/08)

According to Marsh, in the current economic environment,companies can increase their retentions and finance their retainedrisk through the use of a captive.

"Connecticut's excellent reputation as an insurance center andits outstanding knowledge base in accounting, law and technologyalready is drawing clients' interest in Connecticut as a locationfor their new and existing captive insurance companies," JulieBoucher, a managing director of Marsh's U.S. Captive SolutionsPractice, said in a statement.

Firms based in Connecticut that choose to locate their captivesthere also may benefit from ease of travel for board meetings,proximity to the state's insurance department, mitigation of stateself-procurement taxes, and simplified merger laws that may help tofacilitate change of domicile from anywhere in the world toConnecticut, Marsh said.