A Case for a Texas Captive

01 January 2013 Publication
Authors: Kimberly A. Yelkin

FORC Journal Winter 2013

As of September 1, 2013, Texas joined some 31 other states in passing legislation that allows the state to license and oversee captive insurance companies, or “captives.” Under this new business-friendly law, Texas companies or companies with operations in Texas can form a Texas captive to insure certain risks that they may currently self-insure, insure through a non-Texas captive, or otherwise insure commercially.

Insuring through a Texas captive means that a parent company forms a wholly separate insurance subsidiary and licenses it through the Texas Department of Insurance (“TDI”). Once licensed, the parent transfers selected company-wide risk and pays the attendant premium for that risk to the insurance subsidiary. Then, the Texas comptroller charges the parent company premium taxes on the premiums paid to the captive at a rate of .5 percent.

Although the formation of a captive is novel to Texas, utilizing captives to self-insure risk is not a new concept. As early as the sixteenth century, ship owners would meet in London coffee houses and pool funds to cover the cost of risks associated with their ships — a rudimentary form of a group captive.

Read More.

Insights

California Statute Offers Dramatic Change to Independent Contractor, Franchise-Franchisee Relationships
20 September 2019
Legal News: Distribution & Franchise
AI Ouch! AI Job Interview Law Starting in 2020!
20 September 2019
Internet, IT & e-Discovery Blog
RCE PTA Carve-Out Resumes After Interference
18 September 2019
PharmaPatents
The Ninth Circuit Expected to Rule that Doctors Can Be Wrong in the Winter v. Gardens False Claims Act Case
18 September 2019
Legal News: Government Enforcement Defense & Investigations
Lacktman, Ferrante Cited in mHealth Intelligence About Ryan Haight Act
19 September 2019
mHealth Intelligence
Vernaglia Comments on AHA v Azar Decision
18 September 2019
MedPage Today
Tinnen Discusses How Viewpoint Diversity Helps Businesses Thrive
18 September 2019
InsideTrack
Lach Comments on Launch of New Group
16 September 2019
BizTimes Milwaukee
MedTech Impact Expo & Conference
13-15 December 2019
Las Vegas, NV
Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
BRG Healthcare Leadership Conference
06 December 2019
Washington, D.C.
CTeL Telehealth Fall Summit 2019
04-06 December 2019
Washington, D.C.