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HB 2193

captive insurers; certificate of dormancy

57th Legislature - First Regular Session Introduced by David Livingston

Arizona allows captive insurers to obtain dormancy certificates, suspending operations while retaining regulatory status and enabling faster reactivation without full relicensing.

Signed by Governor
0
WeVote Research Nonpartisan
Bill Summary · HB 2193

Legislative bill overview

HB 2193 establishes a "certificate of dormancy" provision for captive insurers in Arizona, allowing them to temporarily suspend operations while maintaining their regulatory status. This mechanism enables captive insurance companies to pause activities without losing their license or going through full dissolution procedures. The bill streamlines the regulatory process for companies that need operational flexibility.

Why is this important

Captive insurers are specialized insurance companies owned by larger corporations to insure their own risks, and they're an important part of Arizona's insurance market and economy. By allowing dormancy rather than forcing full closure or continuous operation, the bill reduces regulatory burden and costs for companies experiencing temporary business changes, while keeping them in position to quickly resume operations. This flexibility can help retain captive insurance business in Arizona rather than having companies relocate to other states.

Potential points of contention

  • Regulatory oversight gaps: Creating a dormancy status may create ambiguity about what oversight and financial requirements apply to inactive captive insurers, potentially creating accountability questions.
  • Consumer protection concerns: Dormant insurers might accumulate fewer financial reserves or oversight during inactive periods, raising questions about their ability to meet obligations if reactivated.
  • Competitive advantage: The provision could be seen as preferential treatment for established captive insurers versus new entrants who must remain actively compliant to obtain licenses.

Compiled from official sources — confirm details with the bill’s official record.

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