These are exciting times for the captive insurance industry, and a recent announcement by the State of Montana builds on the excitement. Captive Insurance Times reported that Montana added 47 captives in 2013. The article noted that:
“During the 2013 legislative session, Montana’s law makers continued their overwhelming support of captive insurance by passing legislation to keep Montana at the forefront of competing domiciles,” wrote Montana commissioner of securities and insurance Monica Lindeen in the report’s foreword.
To read the entire article, CLICK HERE.
Win-Win-Win For Pro-Business States
Like many other pro-business states, Montana is clearly committed to having a strong and innovative captive insurance program. Captive insurance is truly a win-win-win for pro-business state governments.
Win #1 – A vibrant captive industry makes for stronger businesses. Businesses that own their own captive insurance company are better prepared to weather risk and uncertainty. This usually makes them more survivable, particularly as wealth amassed in a captive insurance company provide an additional “war chest” to business owners and CFOs.
Win #2 – A vibrant captive industry creates jobs in the state for professionals including captive managers, attorneys, actuaries, CPAs and third party administration firms.
Win #3 – Licensing captive insurance companies brings revenue into state treasuries. As the article in Captive Insurance Times pointed out, Montana collected $1.3 million in premium taxes on captives licensed in the state.
Competition Among Domiciles Makes Captive Ownership Increasingly Accessible
As the article pointed out, Montana’s legislature has been “passing legislation to keep Montana at the forefront of competing domiciles.” Competition increases accessibility in other industries (think cars, big screen televisions and cell phones… almost everyone can afford them). The same is true when it comes to owning a captive insurance company. Small and mid-sized businesses can own their own captive insurance company and benefit immensely.