Missouri Captive Industry Grows to $1 Billion in Premiums

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March 10, 2010 Wednesday 02:16 PM EST

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Missouri Captive Industry Grows to $1 Billion in Premiums

Meg Green

JEFFERSON CITY, Mo.

The Missouri Department of Insurance said its fledgling captive industry saw "explosive" growth in 2009, with annual premiums jumping to just more than $1 billion up from $123 million in 2008.

The state began to allow captives in 2007, but amended the law in July 2009 to make it easier to set up a captive in Missouri.

"We are very pleased with our growth, given the short time period," said Travis Ford, a spokesman for the department. "The new law has made things a lot more attractive for these new companies."

The department licensed three new captives in 2009, bringing the state's total number of captives to six. The captives write reinsurance or excess coverage for life, health, workers' compensation and general liability.

One big change was the removal of the requirement that captives keep 35% of their assets in the state. Also, the statute was clarified to allow captives to redomicile.

Ralcorp Holdings Inc., a St. Louis-based producer of store-brand foods, was the first company to set up a captive since the law was amended in July (BestWire, Nov. 23, 2009).

Competition among domiciles is heating up as U.S. states vie to host insurance companies and their related business, which bring jobs while boosting tax revenue. In 2007, Vermont, the top captive domicile in the United States, and third-largest in the world, said its busy captive market brought in just about as much revenue as the state lottery. About 30 states now have captive laws on their books, giving companies plenty of choice when looking for a place to set up shop (BestWire, Nov. 2, 2009).

(By Meg Green, senior associate editor, BestWeek: [email protected])

March 11, 2010

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