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FloridaHB 8832026House

Protected Cell Captive Insurance Companies

Sponsored By: Tom Fabricio (Republican)

Signed by Governor

AppropriationInsurance & Banking SubcommitteeCivil Justice & Claims SubcommitteeCommerce CommitteeHouse CalendarRules

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 3 benefits, 0 costs, 6 mixed.

Protected cells gain targeted lawsuit safeguards

Beginning July 1, 2026, lawsuits must identify each protected cell that is a party and separately identify the general account. A case against the company naming no cell reaches only the general account; unnamed cells are not parties. A cell named improperly is entitled to prompt dismissal. A nonparty cell’s records and property receive the same discovery treatment as an unrelated third party’s. That cell can ask the court to protect its confidential papers and documents.

Captive insurers gain conversion and merger options

Beginning July 1, 2026, regulatory approval lets cells become other captive forms and captive insurers become protected cell insurers. Required company filings apply; conversions preserve the applicable original formation or license date and carry cell assets and debts forward. Cells can also move between insurers with both companies’ consent, or merge with company and owner or participant consent. Those moves require regulatory approval, may require plan or document changes, and preserve assets, debts, and the applicable cell’s original formation date. At final conversion or disaffiliation, reporting, examination, and premium-tax responsibility stays with the prior entity for earlier transactions; the successor handles transactions from that date onward.

Protected cells keep separate financial backing

Beginning July 1, 2026, insurers must separately track each cell’s assets and debts under approved plans and participant contracts. Each cell owns its assets, which must cover at least its reserves and other insurance liabilities. Its assets pay only its own claims and expenses, not another cell’s or the company’s general-account insurance debts. Unless a plan, participant contract, or prior agreement says otherwise, cells face no cross-cell seizure or duty to defend another cell. Transfers between cells and the general account require cash or readily marketable securities with established market values; improperly mixed assets remain traceable.

Cell insurers face approvals and filings

Beginning July 1, 2026, license applicants must explain cell accounting, make records available for examination, and show fair expense sharing. They must also submit participant contracts or samples. Florida’s insurance regulator must approve each cell’s business objectives and investment guidelines in writing. Participant contracts, participant additions or withdrawals, and cell creation or termination require prior written approval. Unincorporated cell participants need no biographical affidavits; incorporated cell owners must file them, including series limited liability company members.

Cell insurers must back insurance debts

Beginning July 1, 2026, cell insurance business must be backed by a state-licensed fronting insurer or a Florida-authorized or approved reinsurer. A fronting insurer issues coverage on the captive’s behalf; a reinsurer takes on insurance risk. Cell liabilities neither fronted nor reinsured require security worth at least the related reserves, and Florida’s regulator can require more. Security can include a trust on approved terms, an irrevocable letter of credit, or another approved arrangement. A letter of credit must be issued or confirmed by a regulator-approved bank.

Insurer reporting helps protect solvent cells

Beginning July 1, 2026, protected cell insurers must file annual financial reports showing each cell’s financial experience. They must notify Florida’s insurance regulator in writing within 10 business days after a cell cannot meet claims or expenses. The regulator can separate cells it finds solvent from an insolvent parent insurer. On the insurer’s application, it can approve those cells’ conversion into other captive insurers under an acceptable operating plan. Separation and conversion are not guaranteed.

Insurers gain investment options, face payout limits

Beginning July 1, 2026, insurers can pool two or more cells’ assets for investment without ending their legal separation. Florida’s insurance regulator can approve other reliable methods to value cell assets and debts and rate cell risks. Moving assets between cells requires the affected cells’ consent. Transfers or distributions to the company or participants, including cell dividends, require regulatory approval. The regulator cannot approve a transaction that leaves a cell insolvent or financially impaired.

Insurers gain protected cells with coverage limits

Beginning July 1, 2026, state-approved sponsors can form Florida captive insurers with incorporated or unincorporated protected cells. The insurer can be a stock insurer, mutual corporation, nonprofit corporation, or limited liability company. Incorporated cells are separate captive insurers that can sign contracts; unincorporated cells are accounts, not separate legal entities. These insurers can cover only their cell participants’ risks. Each participant’s losses are limited to its proportional share of assets in the cells named in its contract.

Protected cell insurers must maintain funds

Beginning July 1, 2026, protected cell captive insurers must maintain at least $100,000 in unimpaired paid-in capital. They must also maintain at least $100,000 in unimpaired surplus. A nonprofit insurer must also maintain at least $100,000 in unrestricted net assets. The company’s capital and surplus must stay available to pay its own expenses and claims.

Sponsors & Cosponsors

Sponsor

  • Tom Fabricio

    Republican • House

Cosponsors

  • Commerce Committee

    Affiliation unavailable

  • Insurance & Banking Subcommittee

    Affiliation unavailable

Roll Call Votes

All Roll Calls

Yes: 147 • No: 0

Senate vote • 3/4/2026

Senate Floor Vote

Yes: 37 • No: 0

House vote • 3/3/2026

House Floor Vote

Yes: 110 • No: 0

Actions Timeline

  1. Chapter No. 2026-72

    5/12/2026

  2. Approved by Governor

    5/11/2026

  3. Signed by Officers and presented to Governor

    4/30/2026

  4. Ordered enrolled

    3/4/2026House

  5. In Messages

    3/4/2026House

  6. CS passed; YEAS 37 NAYS 0 -SJ 517

    3/4/2026Senate

  7. Read 3rd time -SJ 517

    3/4/2026Senate

  8. Read 2nd time -SJ 517

    3/4/2026Senate

  9. Substituted for SB 990 -SJ 517

    3/4/2026Senate

  10. Placed on Calendar, on 2nd reading

    3/4/2026Senate

  11. Withdrawn from Rules -SJ 516

    3/4/2026Senate

  12. Received

    3/3/2026Senate

  13. Referred to Rules

    3/3/2026Senate

  14. In Messages

    3/3/2026Senate

  15. CS passed; YEAS 110, NAYS 0

    3/3/2026House

  16. Read 3rd time

    3/3/2026House

  17. Added to Third Reading Calendar

    3/3/2026House

  18. Read 2nd time

    3/3/2026House

  19. Bill added to Special Order Calendar (3/3/2026)

    2/26/2026House

  20. Added to Second Reading Calendar

    2/26/2026House

  21. 1st Reading (Committee Substitute 2)

    2/25/2026House

  22. Bill referred to House Calendar

    2/25/2026House

  23. CS Filed

    2/25/2026House

  24. Laid on Table under Rule 7.18(a)

    2/25/2026House

  25. Reported out of Commerce Committee

    2/25/2026House

Bill Text

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