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Texas becomes captive domicile as Perry signs measure 

June 5, 2013 - Business Insurance Magazine
  

  Texas Gov. Rick Perry signed a bill into law that allows the formation of pure captive insurance companies in Texas.

  The measure the governor signed into law on Monday takes effect Sept. 1. The Texas Legislature   passed the bill in late May.

Under  Texas’ captive law, captives may insure only the operational risks of  the parent company and its affiliates and the risks of controlled  unaffiliated businesses.

Texas captives also would be allowed to  reinsure coverage of affiliates’ or controlled unaffiliated businesses’  operational risks that the captive is allowed to insure directly, as  well as employee benefits offered by affiliates, required liability  insurance, and workers compensation and employers liability coverage.

The law sets the captive premium tax at 0.5% with an annual minimum tax of $7,500 and an annual maximum of $200,000.