We are pleased to report that Arizona HB 2193 (Chapter 145, Laws 2025), a major update to the state's captive insurance regulatory framework, was signed into law this past session and will take effect on September 26, 2025. Kutak Rock's insurance regulatory and government relations team worked directly with stakeholders and policymakers to help secure codification of this important legislation at the Arizona Legislature.
Key Highlights of HB 2193:
- Dormant Captive Status Created
The law establishes a new "dormant captive insurer" designation, available to captives that have ceased issuing policies and have no outstanding liabilities. Dormant captives may apply for a Certificate of Dormancy, valid for up to five years, with renewals permitted. Dormant captives must still maintain a minimum of $125,000 in unimpaired paid-in capital and surplus, file annual reports, and pay renewal fees, ensuring continued regulatory oversight while reducing unnecessary burdens. - Lower Capital Requirements for Protected Cell
Captives
HB 2193 reduces the minimum capital and surplus requirement for protected cell captives from $500,000 to $250,000. Lowering financial barriers to entry will encourage innovation and growth in Arizona's captive market. - Streamlined Renewal Process
Captive insurers must now submit annual license renewal fees between July 1 and September 1, aligning timing requirements, which simplifies administrative compliance. This legislative amendment will not impact 2025 renewal fees, but will take effect for 2026 renewal fees. Please note the following:
- The Department will reach out to captives with a fiscal year
end on or after June 30 to coordinate payment of a one-time partial
annual renewal fee for 2026.
Beginning in 2027, all captives will pay the annual renewal fee between July 1 and September 30 of each year to bring all captives, regardless of fiscal year end, into alignment. - The Department is in the process of updating its Captive and Risk Retention Group Reference Guides to incorporate the changes made in HB 2193 and will be posting the updated guides on or about September 26.
- The Department is planning to issue a communication to the captive community to communicate these updates and changes on or about September 26.
- The Department will reach out to captives with a fiscal year
end on or after June 30 to coordinate payment of a one-time partial
annual renewal fee for 2026.
- Governance and Structural
Updates
To reflect the prevalence of LLC-structured captives, the new law includes several amendments to reflect that LLC-structured captives are governed by a board of managers rather than a board of directors.
Why This Matters
With the passage of HB 2193, Arizona has further modernized its
captive insurance laws, creating new flexibility for existing
captives, lowering capital barriers for protected cell structures,
and clarifying governance and compliance requirements. These
changes make Arizona an even more attractive domiciliary
jurisdiction for captive insurers, balancing growth opportunities
with strong regulatory oversight.
Kutak Rock is proud to have supported this legislation at the Capitol, and we stand ready to help our clients understand how these updates may impact their captive strategy.
If you have any questions about HB 2193 or any other insurance-related legislation or regulatory matter, please do not hesitate to contact the government relations and regulatory experts at Kutak Rock. Our team's vast experience sets us apart and remains unrivaled in helping clients navigate complex issues at the Legislature and with regulators.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
