The Texas captive market continues to see growth year-over-year. Texas has 102 licensed captives in June 2026. This is up from 96 in 2025 and 85 in 2024.
In 2013, Texas lawmakers approved Senate Bill (SB) 734 that allowed the formation of captives. In 2015, SB 667 addressed dividend/distribution authority for captive owners and allowed for captives to pool risks with other affiliated captives or captive reinsurance pools. In 2017, House Bill 1944 authorized captive insurers to be licensed in Texas as reciprocal/interinsurance captive exchange.
Texas captives are licensed to insure only the operational risks of their corporate affiliates or controlled unaffiliated businesses. Captives are subject to a competitive premium tax rate of 0.5 percent (capped at $200,000 annually with a $7,500 minimum). The premium tax rate for nondomiciled captives is 4.85 percent of the taxable premiums. Texas doesn't impose taxes on reinsurance premiums.
"Texas has created a great environment for companies to benefit from the captive model," said TDI's captive insurance specialist Andrew Norton. "We work hard to provide a predictable and efficient regulatory environment. Let us know if your company is thinking about a captive."
