Missouri Entices Offshore Captive Operations

by Glen Shapiro, LawAndTax-News.com, New York

31 July 2009

Governor Jay Nixon has signed a bill that makes improvements to Missouri’s captive insurance laws by simplifying the process of moving offshore captive operations to Missouri. House Bill 577, an omnibus insurance bill, would remove some financial restrictions and clarify provisions on alien redomestication. It also aims to attract companies based outside Missouri to set up captive operations in the state.

"Because of our central location, Missouri is seen as an ideal spot for companies across the country to locate a captive operation," said John M. Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP).

Among the provisions of the new law are:

• Specific allowance of alien redomestication, which makes the process as simple as redomestication of a US-based insurer.
• Allowance for reciprocal formations to accommodate the return of offshore not-for-profit groups.
• Removal of the requirement for mandatory investment in Missouri, to accommodate companies with existing banking relationships.
• Additional options for admittance of available credit as assets for Special Purpose Life Reinsurance Captives.
• Reduction of the number of resident incorporators for Special Purpose Life Reinsurance Captives from two to one.
• A portion of all captive premium tax to be allocated for the DIFP’s captive operations, helping to ensure the long-term viability of the DIFP’s program.

Huff said the new law is a direct response to the current economic climate, in which captives have had trouble finding credit.

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