Louisiana Modernizes Captive Insurance Law with CHOICES Act

Louisiana has enacted a sweeping update to its captive insurance law, now known as the Creating Holistic Options in Coverage for Enterprise and Self-Insurance (CHOICES) Act. Formerly referred to as House Bill 635, the legislation was signed into law as Act 313 during the 2025 Regular Session. 

The CHOICES Act retains the structure of Louisiana's previous captive law but introduces key revisions aimed at clarifying definitions, reducing capital requirements, and establishing new types of captive insurance entities. 

Expanded Definitions and New Captive Structures 

The law replaces all references to "captive insurer" with "captive insurance company" while expanding the term to include association captives, risk retention groups, and affiliated reinsurance companies. It also defines new entity types such as branch captive insurance companies and controlled unaffiliated businesses, aligning Louisiana's framework more closely with other US captive insurance domiciles. 

Risk retention groups are also formally defined and incorporated into Louisiana's captive insurance statute under the act, with a required minimum capital and surplus of $1 million. 

Reduced Capital Requirements 

Act 313 lowers the minimum required capital and surplus for captive entities.

• Pure captives. Reduced from $500,000 to $250,000 
• Association captives. Reduced from $1 million to $500,000 
• Branch captives. Established at $250,000 
• Risk retention groups. Set at $1 million 

The law also confirms that these funds must be held in cash or US government obligations and deposited in a Louisiana-based bank. 

New Frameworks for Dormant Captives and Affiliated Reinsurers 

Under the updated law, dormant captive insurance companies may apply for a certificate of dormancy if they are no longer transacting insurance and have no outstanding liabilities. They must submit specified reports and maintain regulatory approval from the Louisiana Department of Insurance. 

Affiliated reinsurance companies are defined under Act 313 and may only reinsure risks from affiliated insurers. They are subject to distinct licensing, capital, and reporting requirements. 

Filing and Oversight Changes 

Captive insurance companies must obtain a certificate of authority from the commissioner of insurance. The application process, including actuarial review, remains governed by existing fee structures. 

The new law shortens the policy form approval window from 45 to 30 days. Captive-issued policies must also include a prominent notice that they are not covered by state insurance guaranty funds. 

The act also reinforces requirements around board meetings, conflict-of-interest disclosures, and financial filings. Domestic and redomesticating captives must maintain a principal place of business in Louisiana and designate a registered agent. 

Premium Tax and Fees 

Act 313 replaces Louisiana's prior approach to taxing captive insurers, which had followed the same framework as domestic commercial insurers. Under the new law, captive insurance companies are taxed at a rate of 0.15 percent on direct premiums, with deductions for return premiums. The act also sets a minimum annual tax of $7,500 and a maximum of $200,000, creating a more tailored and predictable structure for captives. 

While the tax provisions are newly structured, the $500 application fee and $6,000 actuarial review charge remain unchanged.