Louisiana Adopts Regulation 139 for Captive Insurance Companies

The Louisiana Department of Insurance (LDI) has adopted Regulation 139, implementing rules governing captive insurance companies and risk retention groups domiciled in the state.

The regulation implements provisions of Act 313 of the 2025 legislative session, which established the Creating Holistic Options in Coverage for Enterprise and Self-Insurance (CHOICES) Law. The law provides a statutory framework for the formation, licensing, regulation, and taxation of domestic captive insurance companies and risk retention groups.

Under Regulation 139, prospective captive applicants must participate in a pre-application meeting with LDI before submitting an application. The meeting may be conducted virtually or in person and is intended to address the proposed captive's business plan, ownership and organizational structure, insurance arrangements, and the regulatory and application process.

The regulation applies to captive insurance structures including pure captives, association captives, risk retention groups, and affiliated reinsurance companies. Captives may be organized under several legal structures permitted by Louisiana law, including corporations, limited liability companies, partnerships, limited partnerships, and statutory trusts, subject to approval by the insurance commissioner.

Regulation 139 also establishes requirements for captive managers and other professional service providers. Captives must engage an authorized certified public accountant to prepare audited financial statements and a qualified actuary to provide required actuarial opinions. The regulation also addresses notification requirements involving changes to approved service providers and certain material changes affecting a captive's operations.

The regulation addresses acceptable forms of capital and surplus and establishes procedures for administering the capitalization requirements contained in the CHOICES Law. The commissioner may require additional capital and surplus based on the type, volume, and nature of a captive's business.

Regulation 139 also establishes financial reporting requirements. Captives must file an annual statement of financial condition by March 1 and audited financial statements by June 30. An annual actuarial certification addressing loss and loss-expense reserves is also required.

The regulation provides procedures for captive insurers seeking to redomesticate to Louisiana. It also addresses dormant status for qualifying captives that have stopped transacting insurance business and have no remaining insurance liabilities.

LDI initially issued its notice of intent for Regulation 139 in May 2026. The final regulation was promulgated in September, putting in place the regulatory procedures supporting Louisiana's captive insurance framework under the CHOICES Law.