01/12/2009
Missouri calculates that the recent upswing in captive formation in the domicile will net a total captive premium of $1bn by year-end 2009.
John Rehagen, captive programme manager for the Missouri Department of Insurance, Financial Institutions & Professional Registration (DIFP) said the domicile had reached approximately $635m in premium by the third-quarter of 2009.
“There are three, possibly four more companies coming on by year-end that we’re working on and those are going to add a couple of hundred million more in premium,” he said.
Missouri licensed its fifth captive insurance company in November for leading ‘private label’ (store brand) food supplier Ralcorp Holdings.
The group announced net sales of $2.8bn for the 2008 fiscal year, compared with $1.3bn in 2003.
Missouri has seen growth in written premiums shoot up since captive legislation was introduced in August 2007, rising from $30m in 2007 to $123m at the beginning of this year.
Rehagen attributes much of the growth in premium this year to the formation of large captive reinsurers for life insurance companies.
Missouri Governor Jay Nixon signed House Bill 577 back in July 2009 with the intention of both simplifying the redomestication of offshore captives and attracting new formations from outside Missouri.
“The credit crisis is subsiding and there’s actually credit out there so we’re seeing these life reinsurance captives coming back again,” said Rehagen. “We had several last year that were put on hold, as well as some redomestications.”
Rehagen said he has spoken with Missouri companies who currently own captives in Bermuda and the Cayman Islands who are looking to redomicile to the jurisdiction.
“They have an option now here in Missouri that they didn’t have,” he said. “We’ve made it through two years of start-up and a change in administration and I think Missouri and midwestern companies are starting to see that we’re serious about captive insurance.”
The captive programme manager says Missouri’s fee-based system enables them to maintain and even add resources to the department. “People like the fact that we regulate captives like captives and not like traditional insurance companies,” he said.
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WELCOME TO THE Captive Review Cell Company Handbook 2009 – the second edition of our global directory of cell company jurisdictions. Since we last published this directory, the general attitude toward cell companies seems to have shifted up a gear. Whereas single-parent companies have long ruled the captive roost, a slight uptick in the formation of pure captives at the beginning of this year can’t hide the fact that growth in this market is still sluggish.
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