Aetna Inc. is establishing a subsidiary in Connecticut to protect the Hartford-based health insurance provider against risks. Aetna Risk Insurance Co. will be the state’s fifth licensed captive insurer, Gov. Dannel Malloy announced in a press release Thursday.
Captive insurers assume the risks of a parent company and its related companies and serve as an alternative form of risk mitigation to outside insurance firms.
“Aetna’s commitment in establishing this important subsidiary in its home state speaks to the confidence that business and industry has in Connecticut to grow their operations,” Malloy said in the press release. “We have the skilled workforce to meet the needs of this emerging industry and the regulatory climate to properly oversee them.”
Captive insurers are managed by specialty firms that employ a range of financial, actuarial and legal professionals. Aetna Risk Insurance will provide Aetna with liability coverage in areas including errors and omissions and employment practices.
State Insurance Commissioner Thomas B. Leonardi in the press release said Connecticut has identified captive insurance as a business growth opportunity and created a niche to help companies form sustainable captive insurance operations. The state updated its captive insurance laws in 2011 and created a division within the state Insurance Department to regulate captives in 2012.
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