The captive insurance market in Missouri has seen explosive growth in the past year, with annual premiums soaring past the $1 billion mark in 2009–up from just $123 million a year earlier, according to the state's insurance department.
The department said that while it licensed only three new captives in 2009, the industry has expanded largely because of a new law simplifying the captive formation process.
Gov. Jay Nixon signed HB577 in July 2009, simplifying the process of moving offshore captive operations to Missouri. The omnibus insurance bill makes it easier for companies to bring their captive operations to the state by removing certain financial and investment restrictions and expanding organizational options for captives.
The law also makes it more attractive for companies based outside Missouri to set up captive operations there, the department said.
John Rehagen, captive program manager for the state insurance department, told National Underwriter the updated law in 2009 "got people interested again." He said the three captives licensed in 2009 included a trade association (the smallest one formed), along with a pure captive and a special purpose vehicle formed by a large life insurer and a major corporation.
"The new state law has worked as designed–to encourage more captive formations in Missouri," said John M. Huff, director of financial institutions and professional registration at the state insurance department, adding that "$1 billion in premium volume shows we have a well-established captive program in Missouri and that it's a priority for our department."
HAWAII HIRE
Meanwhile, in other captive news, Strategic Risk Solutions is expanding into Hawaii with the hiring of Judy Nako, former acting deputy commissioner and captive insurance administrator for the Aloha State. Ms. Nako worked for Hawaii's captive insurance branch for eight years, and has 17 years of experience working with insurance companies in Hawaii.
Brady Young, president of Strategic Risk Solutions, told NU that the captive management and consulting firm is "bullish on Hawaii. Hawaii has never been a flash in the pan or a domicile with a lot of peaks and valleys."
Hawaii is the second-largest U.S. captive domicile next to Vermont, and one of the oldest. It first introduced its captive legislation in 1987, and at the end of 2009 had 162 active captives.
Hawaii has been a natural choice for organizations in the Pacific Rim and also attracts some West Coast companies, although captive domiciles Arizona, Utah, Nevada and Montana also attract a large share, according to Mr. Young.
"Our view of the market is that it will continue to grow over time, so we'll see opportunities," he added.
He said that within the last year SRS assumed management of three existing captive companies in Hawaii, "and that was without having a local office or anybody on the ground there."
Ms. Nako, he said, will not only be able to help with existing clients but also with overall growth in Hawaii and elsewhere.
SRS–which has offices in Boston, Mass.; Scottsdale, Ariz.; Charleston, S.C.; and Burlington, Vt.–said activities in Hawaii will be overseen by Ann Wick, president of the SRS Western Division.
The company currently manages its Hawaii-domiciled captives from its Arizona office. "This is a natural progression for us in supporting our growing list of clients in Hawaii," Ms. Wick said. In 2007, SRS launched its Western region operations. SRS said it has seen steady growth and now manages captives in Arizona, Utah and Nevada, in addition to Hawaii.
"We are pleased to welcome Strategic Risk Solutions to Hawaii," said George Sumner, Hawaii's captive administrator and deputy insurance commissioner, in a statement. "This expansion shows the strength of Hawaii as a captive domicile. Judy Nako has been a tremendous supporter of the Hawaii captive community, and we wish her every success at SRS."
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