New legislation has been proposed to loosen up the restrictions on Florida’s captive insurance industry to allow it to be more competitive with the rest of the market, including Bermuda.If the proposals pending in the 2011 Florida Legislature are enacted it would open up the captive market in the southern US state, with both of the currently filed bills, HB 1235, sponsored by Representative Jeanette Nunez (Republican - Miami), and its identical counterpart, SB 1836, introduced by Senator Miguel Diaz de la Portilla (Republican - Miami), changing Florida’s requirements for both authorised captive insurers and creating other types of permitted captive insurance companies.HB 1235 and SB 1836 could result in an increase in captive development in the state as a result of the lowering of capital and surplus requirements, as well as the expansion of the types of captives permitted in Florida, including the creation of a “special purpose captive insurance company”.But Andy Barile, an independent insurance industry consultant, believes that Bermuda will not be greatly impacted by the move should it go ahead.“All it does is add another competitor for Bermuda,” he said.“I think Bermuda has really established itself in the captive market and it is not going to grow by numbers but by size.“A person coming to Bermuda is fairly sophisticated and has an enormous amount of capital to put up to make it a viable concept so they look at it very closely beforehand.”“Captives such as those for oil and nuclear energy to me are industry solutions that still require the infrastructure of Bermuda and I don’t see those moving into a Florida domicile.”Mr Barile said it was usually more advantageous for a Florida-based company to have a captive in the state often for tax reasons - an approach that the state would use to attract business.“The problem here is the political climate versus the reality of what goes on in the insurance world,” he said.“Obviously these are two young Congressmen who are proposing it and they are looking at Vermont and even Hawaii as models.“They are all discussing Bermuda and seeing that it is full of big insurance companies with the infrastructure to handle the likes of Ace, XL, Ariel and Validus, and not so much the smaller captive companies.”Mr Barile said that all of the states were looking at additional ways of raising revenue and looked to Vermont as the business model, but they had to realise that it also had the budget to finance its own captive industry and he envisages states becoming more aggressive to make as much money as possible from the market.However he said it remained to be seen what the thrust of the proposed legislation would be ultimately.