Montana has gained 36 new captive insurance companies and risk retention groups for the year of 2013, bringing the total number of licenses to 150 at 31 December 2013.
The Office of the Montana Insurance Commissioner reported that the Treasure State experienced a net gain of 36 new captive insurance companies and risk retention groups to the state in 2013, bringing the total number of licenses to 150 at December 31, 2013 compared to 114 a year ago.
Aceterrus, an independent captive management firm based in the Northwest US, said that of particular interest in the results was the formation of two new series limited liability companies licensed as captive insurers, one of which was organised by Aceterrus Insurance Resources.
Including the series LLCs in the number of Montana captive insurance company licenses, Montana had 160 active licenses for captives and RRGs at the end of 2013.
Series LLC captives are a new structure in Montana, with the state’s captive insurance association drafting series LLC legislation which was enacted and became effective on 1 October 2013.
Brenda Olson, chair of Montana’s captive association and managing director of Aceterrus, said that in 2010 the Internal Revenue Service provided clarification on the tax elections possible for Series LLCs which helps reduce tax risk for these businesses.
“Series LLCs are cost effective for nearly any industry, including captive insurance and real estate organisations.”
A report from Aceterrus said that Montana continues to thrive as a successful captive domicile, plowing through the "100 captive wall" which blocks other US captive domiciles such as Arizona, Nevada, and South Carolina.
It attributed Montana's success as down to the following reasons: a business friendly regulatory and legislative environment; flexible laws allowing a wide variety of licensing options; continued investment in regulatory support resources by the Montana Commissioner of Insurance; and an extremely low tax environment, whereby insurers are not subject to Montana state income taxes and further enjoy nominal licensing and preferential premium tax rates.
