NU Online News Service, Jan. 24, 11:44 a.m. EST
The captive insurance market in Missouri said it is seeing rapid growth with double the number of captives—12 licensed in 2010 compared to six in 2009.
This is an indication, the Missouri Department of Insurance said, of the state's attractiveness as a captive domicile. The state began licensing captives in 2007, and by 2009, premium volume had reached $1 billion.
Gov. Jay Nixon signed House Bill 577 in July 2009, simplifying the process of moving offshore captive operations to Missouri. The omnibus insurance bill also removed certain financial and investment restrictions for captive operations relocating to Missouri, and it expanded organizational options for captives, the department said.
John Rehagen, Captive Program manager for the department, told NU Online News Service that the domicile is seeing an even mixture of pure captives—with coverages ranging from commercial product deductible funding to reinsurance of certain health coverages—and special purpose captives, which reinsure term life insurance and annuity products.
Of the captives licensed, he said, only one is owned by a Missouri company. Half of the captives formed are from Midwestern states and two are owned by parents from the East Coast.
Mr. Rehagen said that while there were no re-domestications in 2010, several companies are exploring re-domesticating to Missouri. Those companies are primarily from offshore domiciles, but a few are from U.S. domiciles, he added.
Missouri currently has 11 active captives, up from six active at the end of 2009 and three at the end of 2008, he said.
In 2010, the domicile issued six licenses and netted an increase in five active captives, Mr. Rehagen explained.
Because of the spike in formations since the changes in the law in 2009, he said, premium exceeded $1 billion for the first time, "increasing dramatically from $123 million in 2008. While we don't have the final premium numbers for 2010, it is projected that it should again exceed $1 billion," he said.
Looking ahead, Mr. Rehagen said 2011 is "continuing to look very good for the Missouri Captive Program."
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