Texas has passed a law allowing for the formation of pure captive insurance companies within the state.

Companies doing business in the state are now authorized to self-insure, or provide reinsurance for, its own and its affiliate’s operational risks such as employee benefit plans, liability insurance and worker’s compensation insurance.

The new law allows for companies to open its own carriers in the state, but does not permit the formation of independent captive insurance carriers in Texas. However, the Texas Department of Insurance (TDI) may approve foreign captives to transfer domiciles to the state on a case-by-case basis.