Missouri Department of Insurance
Domicile discussions have become much more sophisticated, says John Rehagen of the Missouri Department of Insurance
What’s the competition like in the US between domiciles?
This is a question we get a lot and it is always interesting to me. To some extent, there is competition between the domiciles, but now there are so many jurisdictions becoming increasingly sophisticated that, for a lot of captives, when they are making a decision about where they actually want to place, it has more to do with the nexus of the parent company.
If you have a company headquartered in a particular state then it is going to make sense for a particular captive to locate in that state.
I think we’re always looking as domiciles at our legislation and how we can be better and how we can be more competitive. But as we’re doing that, I’m not sure that it is actually making a huge difference in domicile selection.
If new captives are looking at premium taxes or annual filing fees, the difference between $300 in one place or $5,000 in another is still not enough money to be significant. Domicile discussions have become much more sophisticated now.
Are there any new regulatory updates Missouri?
We last updated our law in Missouri in 2013 and made changes to our cell structure and began allowing sponsored captives. In addition, we also lowered some of our capitalisation requirements, however, what we found so far in Missouri is the law has been working really well for the type of programmes we would like to structure, but we’re always open to change.
I’m always talking to people in the industry, especially people who are doing business in Missouri, and ask that if they find that something is really not working in the law, because we are open to suggestions and changes.
I find that with laws in any state, it is dependent on what’s going on in the industry, whether that’s new risks or new coverages, or general trends that are going on in the industry that not only affect captives but also traditional companies.
As things change, it is necessary for all states to make necessary regulatory changes when appropriate.
Have you licensed any new types of captives?
Our programme in Missouri primarily consists of pure captives, which work really well for us for the infrastructure we have in place.
We have 51 captives now and have a total of $5 billion in premium running through them. We have some really large captives and I think we will continue to be consistent with the applications that we have in the office now.
Pure captives will probably continue to make up the majority of our captives but our law allows for association, cells, and branches, and we’re always open to these structures. We have started to see more mergers and redomestications, so offshore companies are coming onshore, or an onshore company that has two captives that decides that it does not want to continue the cost of maintaining two.
We are certainly seeing more of that in Missouri and I’m assuming that’s the case in other domiciles as well.
What’s new and upcoming in Missouri?
Right now we don’t have any legislative changes planned for our next session, which we start in January. We still have some topics we are considering, which are currently under review but nothing that I can confirm at this time.
We are going to continue to do what we’re doing as that’s working well for our state—focusing on quality captives.
We want to be a resource to those people who are looking to establish captives and that’s what we try to do in Missouri, to be another tool in the risk management chest for companies that are or want to do business in Missouri.
