The Gateway Arch is a 630-foot-high monument in the State of Missouri.
The Gateway Arch is a 630-foot-high monument in the State of Missouri. Clad in stainless steel and built in the form of a flattened catenary arch, it is the tallest man-made monument in the US, Missouri’s tallest accessible building, and the world’s tallest arch. This famous Missouri symbol is a great representation of Missouri’s captive insurance programme—stable, innovative and reaching new heights.
Missouri’s captive insurance programme offers real opportunities for business success to companies interested in maximising efficiency and controlling expenses. Located in the heartland of America, bordered by eight states and with 20 states close enough to be called neighbours, Missouri is conveniently located. In fact 40 percent of the largest publically traded companies are located within a 500 mile radius of Missouri, and nearly half of the manufacturing plants in our country and more than 50 percent of the US population are both within a 600 mile radius.
A competitive economy helps spur company innovation. Missouri continues to remain in the Pollina Corporate Real Estate’s top 10 pro-business states and has the third most diversified economy in the US with a GDP exceeding $258 billion. Further, Missouri ranks in the top 10 states for regulatory environment (Forbes, 2013). Given these advantages, more business owners are seeking the peace of mind that comes from locating their captive in an established, business-friendly mid-west domicile.
Missouri is a leader in the alternative risk transfer market, dedicated to a regulatory environment where businesses can grow and prosper. Captive laws in Missouri are similar to most active domiciles and were enacted to benefit the state and those companies that would prefer to keep their captive closer to their base of operations. Missouri captives currently include Fortune 500 companies as well as small-business owners writing compensation deductibles, property and casualty lines, professional and general liability, life reinsurance, and much more.
Stability
Steady growth and sustainability are the keys to a successful captive programme. In Missouri, the focus is on the overall health of the state’s captive industry rather than the number of captives licensed each year. As a result, Missouri has a diverse mix of captives seeking licensure.
The goal of Missouri’s captive insurance programme is to be the domicile of choice for businesses large and small, a goal the state is well on its way to achieving. During the past 12 months, 13 captives have been licensed, increasing total licences issued to 41. This is an all-time high since the inception of the programme in 2007, and interest continues to grow. Missouri’s law, coupled with its experience in working with companies that use a variety of different methods to manage risk, benefits captives of all shapes and sizes. Missouri captives are subsidiaries of some very noteworthy industry leaders and generate billions of dollars of premium volume and write anywhere from one to 20 lines of coverage.
Missouri captives are formed to mitigate exposure to a wide range of risks. Practically every risk underwritten by a commercial insurer can be provided by a Missouri captive. The majority of the state’s captives provide mainstream property/casualty insurance coverage such as general liability, product liability, workers’ compensation deductible, director and officer liability, errors and omissions liability, auto liability and professional liability. Some of our captives also provide specialised coverage for unusual or hard-to-insure risks.
The captive programme in Missouri is structured in such a way to strictly avoid focusing on, or favouring, any specific type of captive structure or lines of business. Every captive applicant is reviewed on the merits of its application. This ensures a strong environment capable of being tailored to a company’s specific needs. Further, the Missouri captive programme is designed to be a pro-business platform that includes a simplified and efficient application review process with review costs stated up front.
Missouri is strategically focused on creating a sound and solid captive regulatory environment that serves as an asset to companies doing business in Missouri. You will find that the captive programme is both responsible and responsive to the needs of the business community and the captive industry. In Missouri, the focus is not on the number of captives, but rather the quality of the captives doing business in the state. The state’s laws are competitive with other captive domiciles, however, it is not the law that makes Missouri a top domicile, but the way in which the law is administered by an experienced team that is both knowledgeable and accessible. The goal is to provide prudent and balanced regulatory oversight of each Missouri licensed captive for the most favourable long-term effect on the captive industry.
Innovation
As the popularity of captives grows, so have the complexities of the transactions. It remains incumbent upon Missouri to continue to evolve its captive programme to keep pace with the ever-changing risks, something the state demonstrates in its commitment to offer a highly competitive captive programme.
In 2013, the Missouri Captive Insurance Association (MOCIA) led a successful effort to amend the captive law to add sponsored captive insurance companies with incorporated cells and reduce minimum capital and surplus requirements for association captives. These new laws took effect on 28 August 2013 and seamlessly worked into the licensing and regulatory process.
One of the unique features of Missouri’s captive law is the credit allowed each year, which reduces premium taxes by the full amount of renewal fees. In essence, small captives that write less than $2 million per year in premium would only pay a fee and not be subject to additional premium taxes. Large captives also benefit from a reduction in the premium tax and cap of $200,000 on taxes and fees. This feature is a hybrid between pure fee states and tax-and-fee states, and it makes Missouri an attractive domicile to captives of all sizes.
Additionally, the actuarial review fee paid to the Missouri Department of Insurance’s consulting firm cannot exceed the maximum stated cost, no matter how complex. Exams are conducted efficiently and via experienced in-house examiners, minimising cost and time. Missouri is a fee-based state, so the fees paid by captives pay for their regulation, and all fees collected remain in the Missouri Department of Insurance to ensure that adequate staff provides responsive and effective regulation.
Missouri continues significant outreach to the captive community and the state is always interested in hearing proposals and ideas as it works with those in the captive industry to develop new solutions. Missouri also continues to focus on solvency modernisation initiatives important to both the captive insurance industry and the insurance industry at large
The regulatory knowledge and experience of Missouri’s captive staff and the state’s commitment to a strong and sustainable captive programme provide the state with the ability to grow and prosper as a domicile. Missouri insurance regulators are among the best in the country, with a reputation of being professional, flexible and fair.
The Missouri Department of Insurance has a solid programme to license quality captives with sound business plans and good corporate governance, and, as a result, Missouri is now a thriving midium-sized domicile based on the number of captives that it regulates.
Missouri committed to maintaining high standards in the captive community nationwide. The reputation of Missouri and the state’s service providers is exemplary and keeps Missouri on the competitive edge of the global captive insurance stage.
Gateway to success
This is an exciting time in the captive insurance industry, and Missouri welcomes the opportunity to work with both current and prospective captive owners, service providers and industry leaders as it grows the captive industry within its state. The state encourages readers to consider attending two upcoming events this year: the MOCIA’s Captive Insurance Forum in St Louis on 17 and 18 September, and the Director’s Regulatory Summit on 15 October, also in St Louis. Missouri will also host the Western Region Captive Insurance Conference in May 2015.
The department has offices in St Louis, Kansas City and Jefferson City, and uses those offices to ease the burden for out-of-state travelers. Department staff will meet you in the location most convenient for you.
These cities also have the benefit of offering easy access to some of the state’s best amenities, as well as a multitude of insurance and captive insurance experts. The captive service providers necessary to operate captive insurance companies in Missouri are also readily available.
Missouri recognises that choosing the right captive insurance domicile is important for the on-going success of a captive insurance company and is confident its efficient and effective programme will continue to make Missouri a domicile of choice. The state’s full-time team, dedicated solely to the captive industry, is ready to assist you with all of your captive insurance needs. Missouri appreciates the opportunities for economic development within the captive industry and dedicates the resources necessary to support its success.
