Montana licensed a record 26 captive insurance companies in 2010, boosting the number of captives at year-end to 67, also a record, the state Department of Insurance announced.
The 26 captives licensed last year compares with 16 in 2009, eight in 2008 and 10 in 2007, said Steve Matthews, the state’s captive coordinator. Montana began licensing captives in 2001, and by 2009, premium volume had reached $274 million.
Captive insurance companies (captives) are insurance companies formed and wholly owned by the businesses, associations, and groups that they insure. Captives are formed as risk management tools and as alternatives to the traditional insurance market. Captive insurers domiciled in Montana provide insurance to rural hospitals, nursing homes, doctors, commercial trucking companies, contractors, and others. The Legislature passed the captive act in 2001 to take advantage of the economic benefits that can be derived from captive regulation, the DOI said.
“I have been very impressed with the vitality of our state’s captive insurance industry,” said Montana Commissioner of Securities and Insurance Monica J. Lindeen, “I am committed to recruiting more captive business in Montana and building on the success of this economy boosting industry.”
Lindeen said he growth of the captive insurance industry contributes to Montana’s economy through premium tax collections, as well as bringing high-paying support jobs, including attorneys, CPAs, actuaries, a captive association and more to the state. Based on the $1.4 million that has already been collected in premium taxes, the Insurance Commissioner’s office estimates nearly $2 million will be deposited in the state’s general fund in 2011. Montana’s hospitality industry also benefits as people from outside Montana travel here to conduct captive business.
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