Georgia Expands Captive Insurance Framework with Enactment of House Bill 348

Georgia has enacted substantial revisions to its captive insurance code with the passage of House Bill 348, signaling a renewed effort to strengthen the state's position as a captive insurance domicile. The legislation reflects growing momentum among US states to refine their captive insurance laws in response to evolving market needs. Signed into law by Governor Brian Kemp on May 14, the legislation modernizes provisions related to captive licensing, subsidiary structures, and affiliated business relationships.

Among its key updates, HB 348 removes prior limitations on the types of insurance or reinsurance that captives may underwrite. Captive insurance companies are now permitted to write any coverage authorized under Georgia law, subject to the approval of the Commissioner of Insurance.

A new statutory definition of "sponsor" is also introduced for limited purpose subsidiaries. A sponsor may include any entity that forms or co-forms the subsidiary, issues securities on its behalf, participates as an investor, or assists in raising equity or debt.

In addition, HB 348 broadens the definition of "controlled unaffiliated business" to encompass entities with reinsurance, risk-sharing, or other contractual ties to a parent or affiliate; direct or indirect investors in a pure captive; and those whose risks are directly or indirectly ceded to a captive insurer. The updated definition captures a wider range of business relationships now recognized under Georgia law.

The Georgia Captive Insurance Council, which supported the bill during the legislative process, has described the legislation as an important advancement for the state's regulatory framework. These changes position Georgia's captive statute to align more closely with practices seen in other competitive US captive insurance domiciles.