Missouri Department of Commerce & Insurance
Sam Komo speaks to John Savage about the advantages of domiciling in Missouri
What are the advantages of domiciling in Missouri? What advantages does Missouri have over other domiciles?
We believe every domicile offers the same product within the same price mark, broadly speaking. However, the true difference is how Missouri makes it work within its laws and how services rendered are paid.
For instance, Missouri captive insurance law does not define “agency captives.”
This means any company that is categorised by other domiciles that way could be considered as a ‘pure captive’ in Missouri state and have the same options and outcomes as other companies.
Regulatory service costs come down to internal staff or external contractors. However, unless there is no state oversight, these additional costs are passed onto captive companies. Missouri has a simple process – a US $7,500 annual fee that is 100 per cent deductible from premium tax.
The decision to start a captive insurance company is a big step for any business looking to take control of their financial risk, but an equally important choice is: where to domicile.
Legislators in Missouri understand the significance of this selection and encourage every potential, or current captive insurance company, to review all the information available as they would any business decision.
What are Missouri’s biggest achievements in recent years?
In 2007, Missouri established captive insurance law to support the business community looking for options to manage their financial risk. This philosophy continues to be the centerpiece of the Missouri Captive Insurance Program.
As of 1 January 2023, there are 55 active licensed captive companies domiciled in Missouri, with gross written premiums, totaling over US $4.7 billion, as of 2021.
Encouraging captive insurance growth is one element of our philosophy, the other is protecting the success of Missouri’s current captive insurance companies. This is accomplished by providing necessary oversight that does not stagnate growth, but rather protects our companies from outside scrutiny.
What impact has the hardening market had on Missouri captive business?
According to the Insurance Information Institute, the US captive market decreased by 604 companies between 2017 and 2020. This trend leveled off in 2021, when the same market increased by 388 captive companies, totaling more than 3069 insurance captive companies by year-end.
While Missouri experienced similar negative growth to the national market in 2019 and 2020, our data suggests steady growth in 2021 and 2022.
Six new captive insurance companies were licensed in 2021, while eight new captive insurance companies were licensed in 2022, including a sponsor captive.
The Missouri Department of Commerce and Insurance already licensed its first 2023 captive company in mid-January, and based on multiple conversations regarding pure and sponsor captives with other interested businesses, we believe this upward trend will continue into 2024.
Are global pandemic effects still being felt in many jurisdictions? And what’s on the horizon for Missouri captives in 2023?
At the start of the COVID-19 pandemic, Missouri quickly pivoted to a paperless and electronic payment structure to ensure its captive companies would not experience any disruption to service.
Throughout the height of the pandemic, the Missouri Captive Insurance Program continued to offer services that were successful, while proactively looking for other ways to enhance its current processes.
The industry is always evolving – regardless of the hardening market. The challenge for any domicile is to stay ahead of the curve. Missouri sees this challenge as an opportunity and will always be open to ideas that will support the captive insurance industry.
This is why we continually communicate with the Missouri Captive Insurance Association for opportunities.
