Missouri Department of Insurance
Missouri’s no frills approach to captive insurance means it maintains a friendly and reliable regulatory environment, keeps costs low and adapts for the needs of each captive. John Talley of the Missouri Department of Insurance, says this is where the state’s success lies
Missouri’s no frills approach to captive insurance means it maintains a friendly and reliable regulatory environment, keeps costs low and adapts for the needs of each captive. John Talley of the Missouri Department of Insurance, says this is where the state’s success lies
What is the current state of the Missouri captive market?
This is the 11th year since our captive legislation was enacted in Missouri, and it is now a mature domicile with a healthy market providing benefits to captive owners through a wide range of captive programmes. We are continuing to issue new licenses and receive numerous inquiries from companies and service providers interested in our captive programme. Presently, we have licensed 63 captives, which wrote $3.9 billion in premium in 2017. Missouri is consistently a top five domicile by this measure each year.
I’ve written articles regarding topics of interest that I have been discussing with current and potential captive owners related to terrorism and farming risks in captives. I am looking forward to speaking engagements in the next few months to further assist and engage with the captive industry in Missouri.
How was 2017 as a year for the Missouri captive market?
We had a positive year overall. The companies we licensed last year have become very active. I believe they’re going to grow very quickly. In fact, I’ve had captive managers asking about new things they can do. In most cases, the answer is positive and I work closely with our captives to help them get things done while making sure they are adequately prepared for the move by analysing their accumulated surplus to allow for prudent expansion of their programmes.
We licensed four captives in 2017. The soft market conditions reduced the urgency of some other potential applicants, but, there are still a number in the pipeline that we expect to see come into formation this year.
How has the start of 2018 been?
The first quarter has been good. We licensed two pure captive formations and approved one redomestication. One of the pure captive formations was a bank captive, the first of its kind in Missouri. The Missouri commissioner of finance, which is a division director under the department umbrella, was very positive about the formation of this captive. This may open up a new industry in Missouri for captive formations.
I am seeing increased interest in captive formations in the agricultural industry. Companies and captive service providers are contacting me expressing interest, and I expect discussions of these programmes will continue throughout the year. I am also in active discussions with potential pure captive applicants from other industries and a potential sponsored cell captive in the construction industry. Given we are already off to a strong start, and with what we are actively working on already, we’re expecting solid growth in 2018.
Are there any recent developments of note in Missouri?
The Western Region Captive Insurance Conference is the biggest thing on the horizon right now. My staff and I plan to attend and I am scheduled to speak at the event. The department is thrilled to participate in this conference that is co-sponsored by the Missouri Captive Insurance Association.
We are also happy to welcome the gathering to Missouri this year and, in addition to my staff, my division director and former captive programme manager John Rehagen will be in attendance. Director Chlora Lindley-Myers will welcome attendees Monday evening and is very supportive of our captive programme. Some may not know that our director was most recently with the Tennessee Department of Commerce and is very familiar with the steps Tennessee has taken to successfully revive its captive insurance programme. It’s great to have such knowledge of the captive industry at the highest levels of leadership within the department. Not many states can claim that level of support.
Other than that, we are going to stay the course that has led to the development of our very successful captive programme. Missouri will continue to promote the qualities that make us a premier captive jurisdiction: knowledgeable regulators providing quality regulation; high responsiveness to company requests; low examination costs and reasonable fees and premium taxes.
Are there any recent regulatory changes that have made an impact?
We did not have any regulatory changes in 2017. Our legislative session ends on 18 May but we’ll see what happens in planning for the next session this fall. We are always interested in discussing technical changes or enhancements to our statute to help keep up with the needs in the captive market. However, presently our statute is designed to give the director a lot of discretion and it works quite well.
Is there anything to look out for moving forward?
I believe agriculture business captives might be the next big thing for Missouri. Agriculture is Missouri’s number one industry, and not only do we have large agricultural businesses, but we also have smaller or middle sized businesses. From my recent contacts, I feel many will be moving from exploring the captive concept to implementation soon.
What is it that sets Missouri apart as a captive domicile?
Our regulatory system is geared toward helping the companies with their individual needs. We have the flexibility and knowledge to work with just about any type of captive programme. Since each captive is unique, we work with the individual captive to develop the best programme possible for them.
Our costs are low. Our application and renewal fees are deductible from a company’s premium tax payment. Our exam costs are low because we perform them with our in-house examination team.
Missouri is in the middle of the country and we have two major cities on either end. You can fly in and out the same day if need be. We have department offices in Jefferson City, Kansas City and St Louis providing convenience when meeting with the department. We are flexible and accommodating if you need to travel to the state.
Companies operating in Missouri are seeing a substantial decrease in expenses. It’s cheaper to do business in Missouri because of our lower cost of living and the elimination of travel expenses to other distant captive domiciles.
What are you most looking forward to about the Western Region Conference?
I’m looking forward to people from all over the country coming to St. Louis and personally helping them gain an understanding that Missouri is an excellent domicile in which to form and operate a captive insurance company. We are going to have a major presence there and will be able to show off our experience and knowledge, while also being able to stay close to home.
I have written articles on terrorism and agricultural risks recently and will be writing more articles on additional captive topics in the future. I want to accentuate the fact that Missouri understands industry risks and can work with any company that desires to domicile a captive in the state.
