Montana State Auditor John Morrison approved two new Montana companies that can provide insurance in the captive insurance market. The State Insurance Depart-ment has licensed MHA Worker’s Compen-sation Reciprocal Insurance Co. and Eadon-ton Insurance Co. as captive insurance companies in Montana. The new captives will insure the risks of a number of Montana hospitals and a California construction company.
According to the Auditor’s office, Montana is one of a number of states in the nation aggressively pursuing captive insurance business. A captive may be used to provide for some or all of its parent company’s insurance. Benefits of forming a captive include stabilizing insurance costs, providing greater access to reinsurance and tailoring coverage for special insurance needs.
The 2001 Legislature passed a law at Morrison’s request allowing captive insurance companies to operate in Montana. Currently, there are 12 captive insurance companies formed in the state to insure rural hospitals, nursing homes, fuel stations, commercial trucking firms, investment firms, medical professional firms, construction companies and attorneys. Additionally, three captive management companies and the Rocky Mountain Captive Insurance Association have formed in Montana. Morrison’s goal is to make Montana the leading captive domicile in the West.
Morrison requested additional legislation in the 2005 session further streamlining the captive insurance process in the state.
“The captive insurance industry is the type of business I have been working to encourage in Montana to help diversify our economic base,” Morrison said. “I am confident Montana’s infrastructure and laws will attract other businesses wishing to take advantage of this opportunity.”
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