The Florida Senate

The bill authorizes the creation of a specific type of captive insurance company in Florida – protected cell captive insurance companies. Captive insurance is a specialized form of self-insurance allowing a business to create its own insurance company to cover specific types of risk; an insurance company that is owned and controlled by the business it insures.

A “protected cell” captive insurance company (PCC) is a single legal insurance entity that allows legally segregated companies to effectively receive the benefits of the captive insurance model without the costs of the full set-up of a standalone captive insurance company. The business joins the PCC but its assets are kept in its own walled-off cell. The assets in one participant's account may not be used to pay liabilities in another unless the respective participants have entered into an agreement to do so. Each cell functions like a separate company protecting its finances from other cells and the core's general business.

The bill establishes the requirements for a domestic PCC, which include that:

• A PCC must establish and maintain minimum capital or net assets of $100,000 and an unimpaired surplus of at least $100,000.
• A PCC must be incorporated as a stock insurer with its capital divided into shares and held by the stockholders, as a mutual corporation, as a nonprofit corporation, or as a limited liability company.
• An applicant to form a PCC must file information with the Office of Insurance Regulation (OIR) detailing how it will account for the expense experience of each cell, acknowledging OIR’s jurisdiction to inspect or examine financial records, all contracts, and evidence that expenses will be allocated to each cell fairly and equitably.
• The creation of protected cells is subject to OIR approval and attributions of assets and liabilities between a cell and the general count must be in accordance with the plan and operation and participant contracts approved by the OIR.
• A PCC must establish procedures to properly identify each protected cell and the assets and liabilities attributable to each protected cell and to keep such assets separate from the assets of the PCC’s general account and other protected cells, except that the assets of multiple cells may be combined for the purposes of investment.
• Upon an order of supervisions, rehabilitation, or liquidation of a PCC, the receiver shall manage the assets and liabilities of the PCC.
• Assets of a protected cell may not be used to pay any expenses or claims other than those attributable to such protected cell.

The bill has an indeterminate impact on state revenues and expenditures. Depending on the number of insurance companies which choose this model, the implementation of the bill may affect the Office of Insurance Regulation. However, such impact can be absorbed within existing resources.

If approved by the Governor, or allowed to become law without the Governor's signature, these provisions take effect on July 1, 2026.

Vote: Senate 37-0; House 110-0