Missouri upgrades captive law

By Gavin Bradshaw 27/07/2009

Missouri Governor Jay Nixon has signed a new bill making it easier for offshore owners to relocate their captive insurance companies to the onshore US domicile.

House Bill 577, an omnibus insurance bill, simplifies the process of redomiciling a captive by removing certain financial restrictions and clarifying provisions on alien redomestication.

The bill is also intended to make it attractive for companies based outside Missouri to set up captive operations in the jurisdiction.

“Because of our central location, is seen as an ideal spot for companies across the country to locate a captive operation,” said John M Huff, director of the Department of Insurance, Financial Institutions and Professional Registration (DIFP).

“With this new legislation, Missouri is opening its doors even wider for companies who want to relocate their captive operations here,” he said.

The new law also contains provisions allowing for reciprocal formations to accommodate the return of offshore not-for-profit groups and removes a requirement for mandatory investment in Missouri, to accommodate companies with existing banking relationships.

In addition, it allows for additional options for admittance of available credit as assets for Special Purpose Life Reinsurance Captives and reduces the number of resident incorporators for such captives from two to one.

Similarly to recent changes in Vermont’s captive law, the revised Missouri law included a provision mandating a portion of all captive premium tax to be allocated for the DIFP’s captive operations.

Huff said the new law is a direct response to the current economic climate in which captives have experienced trouble-finding credit, adding that access to credit was vital to captives being able to effectively operate their business.