NU Online News Service, March 5, 9:30 a.m.EST

The captive insurance market in Missouri has seen explosivegrowth in the past year, with annual premium for captives reachingmore than $1 billion for 2009--up from $123 million in 2008,according to the Department of Insurance.

The department said it licensed three new captives in 2009 andthat the industry has expanded largely because of a new state lawsimplifying the captive formation process.

Gov. Jay Nixon signed HB577 in July of 2009, simplifying theprocess of moving offshore captive operations to Missouri. Theomnibus insurance bill makes it easier for companies to bring theircaptive operations to Missouri by removing certain financial andinvestment restrictions and expanding organizational options forcaptives. The law also makes it more attractive for companies basedoutside Missouri to set up captive operations there, the departmentsaid.

John Rehagen, Department of Insurance, Financial Institutionsand Professional Registration captive program manager, toldNational Underwriter that the domicile has licensed sixcaptives since its captive legislation was passed in August 2007.The updated legislation in 2009 "got people interested again." In2009, he said the three captives licensed consisted of anassociation, a pure and a special purpose captive. The smallestcaptive formed, he said, was a trade association, the others were alarge life insurer and a large corporation.

"The new state law has worked as designed: to encourage morecaptive formations in Missouri," John M. Huff, director of the DIFPsaid in a statement. "$1 billion in premium volume shows we have awell established captive program in Missouri and that it's apriority for our department."

A captive insurance company is formed to insure some of therisks of its owner and subsidiaries, similar to self-insurance.

Mr. Rehagen, said he will attend the Captive Insurance CompaniesAssociation International Conference in Orlando, Fla., March 7-9,where he will represent Missouri in a conference breakout sessionwith domicile regulators, March 8 at 4:30 p.m.

Companies interested in bringing captive operations to Missourican contact Mr. Rehagen at 573-522-2563, or online.