Captive Insurance Company Amendment Act of 2026

MURIEL BOWSER
MAYOR
January 29, 2026
The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
John A. Wilson Building
1350 Pennsylvania Avenue, NW, Suite 504
Washington, DC 20004
Dear Chairman Mendelson:
Enclosed for consideration by the Council of the District of Columbia is the “Captive Insurance
Company Amendment Act of 2026” (“Bill”). The purpose of the Bill is to amend the Captive Insurance
Company Act of 2004 to update protected cell captive insurers’ requirements related to formation,
capital, application, transacting business, taxes on premiums collected, and annual reports. The Bill
would also establish standard requirements for inactive captive insurance companies, and create
rulemaking authority.
The captive insurance industry and the regulation of captive insurers is constantly evolving and requires
jurisdictions that license and regulate captive insurers to continually review, fine-tune, update, and
enhance their captive insurance laws to keep up with changes, retain current captives, and attract new
ones. The District last updated its laws related to captive insurance companies in 2015 and
The District is one of the largest state regulators of captive insurance companies in the country. The most
recent updates to the law were made in 2015, and this legislation would bring the District up to date with
industry and national standards. Proposed changes include new provisions to address the evolving
regulation of captive insurers, changes to provisions deemed outdated or no longer necessary, and
technical corrections to the law. These amendments will enhance DISB’s position as a national leader in
licensing and regulating captive insurance companies.
I urge the Council to take prompt and favorable action on the Bill.
Sincerely,
Muriel Bowser
Enclosure
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ABILL
Chairman Phil Mendelson
at the request of the Mayor
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
12 To amend the Captive Insurance Company Act of 2004 to update protected cell captive insurers'
13 formation requirements, capital requirements, application requirements, requirements for
14 transacting business, the tax on premiums collected, annual reports, and applicable laws;
15 and to establish requirements for inactive captive insurance companies and rulemaking
16 authority.
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18 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, that this
19 act may be cited as the "Captive Insurance Company Amendment Act of 2026".
20 Sec. 2. The Captive Insurance Company Act of 2004, effective March 17, 2005 (D.C.
21 Law 15-262; D.C. Official Code§ 31-3931.01 et seq.), is amended as follows:
22 (a) Subsection (a-1) of Section 4 (D .C. Official Code§ 31-3931.03) is amended by
23 striking the phrase "articles of incorporation" and inserting the phrase "articles of incorporation
24 or organization" in its place.
25 (b) Subsection (b) of Section 5 (D.C. Official Code§ 31-3931.04) is amended as follows:
26 (1) Paragraph (6) is repealed.
27 (2) Paragraph (8) is amended by striking the phrase "articles of incorporation" and
28 inserting the phrase "articles of incorporation or organization" in its place.
29 (3) Paragraph (8)(A) is amended by striking the phrase "shall not own shares" and
30 inserting the phrase "shall not own shares, units, or interests" in its place.
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(4) Paragraph (9) is amended by striking the phrase “protected cell captive 31
insurer” and inserting the phrase “protected cell captive insurer that is approved to form one or 32
more protected cells” in its place. 33
(5) Paragraph (12) is amended by striking the phrase “abbreviation “IC”” and 34
inserting the phrase “abbreviation “IC” in its name” in its place. 35
(c) Section 7 (D.C. Official Code § 31-3931.06) is amended as follows: 36
(1) Subsection (b) is amended by striking the phrase “form of cash or an 37
irrevocable letter of credit” and inserting the phrase “form of cash, cash equivalents, or an 38
irrevocable letter of credit” in its place. 39
(2) Subsection (d)(1) is amended to read as follows: 40
“(1) Be issued by a bank that is a member of the United States Federal Reserve 41
System, or its deposits are insured by the Federal Deposit Insurance Corporation, a credit union 42
whose members’ deposits are insured by the National Credit Union Administration, or a bank 43
chartered in a foreign jurisdiction approved by the Commissioner.”. 44
(3) Subsection (k) is amended by striking the phrase “to make the a payment” and 45
inserting the phrase “to make the payment” in its place. 46
(d) Section 10 (D.C. Official Code § 31-3931.09) is amended as follows: 47
(1) Subsection (a) is amended to read as follows: 48
“(a) A captive insurer, including protected cells, shall apply to the Commissioner for a 49
certificate of authority. The application shall include:”. 50
(2) New subsections (d-1) through (d-3) are added to read as follows: 51
“(d-1) The Commissioner may issue a certificate authority for one or more protected cells 52
of a protected cell captive insurer, on an expedited basis. To be eligible for an expedited 53
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certificate of authority, a captive manager shall initially file a complete application for a 54
protected cell. Upon approval of the initial protected cell, a captive manager shall file the 55
following information for the licensing of subsequent protected cells: 56
“(1) Captive Insurance Company Application and Business Plan Summary 57
form—22(c); 58
“(2) A business plan; 59
“(3) Five-year financial proformas, including support for premiums and estimated 60
losses; 61
“(4) Draft corporate documents for an incorporated cell; 62
“(5) Any information and documents that differ from the information and 63
documents in the application for the initial cell.” 64
“(d-2) Once the documents in paragraph (d-1) and executed corporate documents for 65
incorporated cells have been received, the Commissioner shall issue a certificate of authority to 66
the captive manager within two business days. 67
“(d-3) The Commissioner, with agreement of a manager, deviate from the processes in (d-68
1) and (d-2) to may issue a certificate authority for one or more protected cells of a protected cell 69
captive insurer, on an expedited basis, as long as the amended process is similar to those in 70
subsections (d-1) and (d-2).”. 71
(3) Subsection (f) is amended to read as follows: 72
“(f)(1) A captive insurer shall include its strategic business plan with its application for 73
the issuance of its certificate of authority. If the captive insurer intends to make any material or 74
substantive changes to its strategic business plan, the captive insurer shall file a copy of the 75
amended strategic business plan with the Commissioner for prior written approval. 76
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“(2) A pure captive insurer or a protected cell captive, including its protected 77
cells, except for protected cells of a risk retention group, may make a material or substantive 78
change to its strategic business plan without the Commissioner’s prior written approval if the 79
captive insurer’s board of directors and captive manager determine that the change does not 80
violate any applicable law or regulation and does increase the risk of insolvency. The captive 81
insurer or its captive manager shall notify the Commissioner of any such change in writing 82
within thirty (30) days of such change. The Commissioner may disallow a material or 83
substantive change to a pure captive insurer’s strategic business plan if such change violates an 84
applicable law or regulation or the change threatens the solvency of the captive insurer or 85
protected cell.”. 86
(e) Section 12 (D.C. Official Code § 31-3931.11) is amended as follows: 87
(1) Subsection (c)(3) is amended to read as follows: 88
“(3) Make adequate arrangements with a bank chartered in the District, a bank 89
that is a member of the United States Federal Reserve System or the deposits of which are 90
insured by the Federal Deposit Insurance Corporation, a credit union whose members’ deposits 91
are insured by the National Credit Union Administration, or a bank chartered in a foreign 92
jurisdiction that is approved by the Commissioner;” 93
(2) Subsection (d) is amended by striking the phrase “in the District”. 94
(f) A new section 12a (D.C. Official Code § 31-3931.11a) is added to read as follows: 95
“§ 31-3931.11a Inactive Captive Insurance Companies.” 96
“(a) The Commissioner may place a captive insurance company, other than a risk 97
retention group, in an inactive status if such captive insurance company satisfies the following: 98
“(1) The captive insurer has ceased transacting the business of insurance; 99
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“(2) There are no remaining liabilities associated with policies written or assumed 100
by the captive; and 101
“(3) The captive insurer is in compliance with all applicable District laws and 102
regulations. 103
“(b) An inactive captive insurer shall maintain unimpaired capital and surplus in an 104
amount determined by the Commissioner. 105
“(c) An inactive captive insurer shall not be subject to or liable for the payment of any 106
premium taxes or fees for any full year the captive insurance company is inactive. 107
“(d) The Commissioner may, by rulemaking, exempt an inactive captive insurer from any 108
filing or reporting requirements required by this Chapter. 109
“(e) An inactive captive insurer shall obtain written approval from the Commissioner 110
prior to resuming the business of insurance.”. 111
(g) Section 13 (D.C. Official Code § 31-3931.12) is amended as follows: 112
(1) Subsection (a-1) is amended by striking the phrase “March 2” and inserting 113
the phrase “March 1” in its place. 114
(2) Subsection (b)(1) is amended by striking the phrase “March 2” and inserting 115
the phrase “March 1” in its place. 116
(3) A new subsection (b-1) is added to read as follows: 117
“(b-1) “Net direct premiums” shall include all premiums, fees, levies, or 118
assessments charged by a captive insurer, even if billed separately to policyholders. Net direct 119
premiums shall be reported on the premium schedule in the captive insurer’s annual statement.”. 120
(4) Subsection (i) is amended by striking the phrase “the a request” and inserting 121
the phrase “the request” in its place. 122
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(h) Section 14 (D.C. Official Code § 31-3931.13) is amended as follows: 123
(1) Subsection (a)(1) is amended by striking the phrase “March 2” and inserting 124
the phrase “March 1” in its place. 125
(2) Paragraph (2) of Subsection (b) is amended by striking the phrase “March 2” 126
and inserting the phrase “March 1” in its place. 127
(3) A new subsection (d) is added to read as follows: 128
“(d) Documents, materials, and other information submitted pursuant to this section, and 129
any rules promulgated thereunder, shall be confidential and shall be exempt from the Freedom 130
of Information Act of 1976, effective March 29, 1977 (D.C. Law 1-96; D.C. Official Code § 2-131
531 et seq.), and shall not be subject to subpoena or discovery or admissible in evidence in a 132
private civil action, and shall not be divulged to any person except either as provided for in this 133
subsection or with the written consent of the captive insurer or protected cell.”. 134
(i) Subsection (a) of Section 23 (D.C. Official Code § 31-3931.22) is amended to read as 135
follows: 136
“(a) Except as otherwise expressly provided in this chapter, no other chapter of this title 137
shall apply to captive insurers. The following laws shall apply to risk retention groups licensed as 138
captive insurers:”. 139
(j) Section 204 (D.C. Official Code § 31-3932.04) is amended by adding a new 140
subsection (f-1) to read as follows: 141
“(f-1) The Commissioner may require the applicant to retain legal, financial, or 142
examination services from outside the Department to review and make recommendations 143
regarding the applicant’s qualifications, and to submit those reports and recommendations to the 144
Commissioner for his or her review. The cost of those services shall be paid by the applicant.”. 145
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Sec. 3. The Risk Retention Act of 1993, effective October 21, 1993 (D.C. Law 10-46; 146
D.C. Official Code § 31-4101 et seq.), is amended by adding a new Section 14 (to read as 147
follows: 148
“Sec. 14 Rulemaking Authority. 149
“The Commissioner may issue rules relating to captive insurers licensed as risk retention 150
groups as necessary to carry out the provisions of this chapter.”. 151
Sec. 4. Effective date. 152
This act shall take effect following approval by the Mayor (or in the event of veto by the 153
Mayor, action by the Council to override the veto), a 30-day period of congressional review as 154
provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 155
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publication in the District of 156
Columbia Register. 157
1350 Pennsylvania Avenue, N.W., Suite 409, Washington, D.C. 20004
Phone (202) 262-6402 Email: adele.el-khouri@dc.gov
GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE ATTORNEY GENERAL
BRIAN L. SCHWALB
ATTORNEY GENERAL
LEGAL COUNSEL DIVISION
ME
MORANDUM
TO: N
icole West
Policy Advisor
Department of Insurance, Securities & Banking
FROM: Adele El-Khouri
Deputy Attorney General
Legal Counsel Division
DATE: May 23, 2025
SUBJECT: Legal Sufficiency Review of the “Captive Insurance Company Amendment Act of
2026”
(A
E-25-49)
_____________________________________________________________________________________
This is to Certify that the Office of the Attorney General has reviewed the
above-referenced legislation and found it to be legally sufficient. If you have any questions in this
regard, please do not hesitate to call me at (202) 262-6402.
_________________________________
Ad
ele El-Khouri