The Montana Captive Insurance Association, Inc. (MCIA) said that a measure passed by the legislature that eases requirements for captive operations should strengthen the state's position as a captive domicile.
HB160 awaiting the signature of Gov. Brian Schweitzer, was given final approval by the House March 9 on a 47-1 vote. MCIA said they expect Mr. Schweitzer to sign it before the end of the month.
Under the new law, Montana-licensed captives will be able write surety and marine insurance. The maximum premium tax remains capped at $100,000 per year, with a pro-rated payment schedule now applicable for first year captive insurance companies subject to the minimum tax to help reduce front-end organizational costs.
The bill also codifies the commissioner's authority to waive the risk based capital (RBC) report for risk retention groups that have been in existence for less than two years. With regard to the formation of captives, the number of required organizers has been reduced from three to one.
Providing additional flexibility for RRG investments, the law gives the commissioner discretion to approve up to 20 percent of admitted assets in rated credit instruments in any one investment that meets certain statutory requirement for RRGs with total admitted assets of less than $5 million.
Steve Matthews Montana's captive coordinator and chief financial examiner, said in an interview earlier this month that the domicile licensed eight captives in 2008, and lost two, compared with 10 licensed in 2007. The state has a total of 36 captives, 11 of which are risk retention groups. As of early March, he said the domicile had licensed two captives, making 2009, so far "a normal start for us."
MCIA, a trade association representing the Montana captive insurance industry, has scheduled a discussion of the new law at its Spring Seminar, scheduled April 1-2, in Helena, Mont. The group's annual conference is set for July 21-23, in Whitefish, Mont. Additional information is online at www.mtcaptives.org.
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