John Rehagen
Captive program manager, Missouri Department of Insurance, Financial Institutions and Professional Registration
Missouri: the captive domicile close to home
Located at the heart of the US, Missouri offers captive owners stability, business-friendly regulation and an increasingly experienced captive team.
Stability, responsiveness and flexibility are what your captive can expect in Missouri. Missouri’s common-sense regulation and location at the geographic and population centre of the US create the fuel that drives our successful domicile. Missouri is within a time zone of the majority of the country, which makes it easy to get to and from, as well as a natural fit for companies considering forming or relocating their captives. Missouri offers convenience and expense reductions for those companies that choose to keep their captive close to home. Missouri is a great place to do business; numerous Fortune 500 companies are headquartered here or have significant distribution or strategic production facilities in the state. The captive law is conducive to successful operations, and the department prides itself on hard work and its reasonable approach. Governors and legislators from both political parties have endorsed the original captive law and a recent update that has accelerated captive growth. Missouri continues to offer the politically stable, pro-business climate needed for successful captives.
The captive programme has continued to grow despite persistent
soft-market conditions and the effects of the financial crisis. Since legislation was updated in 2009, the captive programme has seen even more dramatic growth. The legislative changes modified licensing and redomestication requirements to adapt to the credit crisis and make Missouri attractive to companies located anywhere. 2010 was a great year; captive premium increased from $1 billion to $1.5 billion. Many domiciles would be pleased to reach $500 million in premium, but that was just the increase in Missouri last year. Licences issued doubled in 2010 from six to 12, and nine of the 12 licences have been issued since the legislative update. The momentum of the captive
programme is increasing, and maintaining legislation that is beneficial to captive insurance and the state is a priority.
While the premium increase is remarkable, the department is keenly
aware of the issues related to growing too fast. Responsiveness and personal attention to applications and business plans are being maintained. Owners know that the department can work at the pace of their business. Application reviews are typically completed in less than 30 days, and business plan changes can be completed in just a few days. Fees paid by owners go directly to ensuring there is always adequate staff in the captive section and those fees are always 100 percent deductible from future premium tax. All captives enjoy this cost reduction, but as a result of this deduction, captives that write less than $2 million in direct premium and assume less than $3.5 million pay no premium tax. This unique fee-based structure has ensured that the department is responsive now and in the future.
Midwestern business and insurance companies partnered with
state government to enact the captive law in 2007. It was flexible enough to allow for most traditional captive structures as well as take advantage of the unique international reinsurance experience within the department. The law allows for regulation that is appropriate to the success of each captive and limits regulatory mandates imposed by other outside agencies. Because of this flexibility, Missouri has proven attractive to very large captives owned by national and international insurance companies as well as pure and association captives from across the US. Currently, owners hail from the District of Columbia, Maryland, Minnesota, Missouri and New York. In addition to Midwest locations, Missouri’s programme is truly attracting owners from around the country and for all types of business.
US Captive . April 2011 43
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