Montana Captive Insurance Association Releases 2023 Domicile Report

The Montana Captive Insurance Association (MCIA) has released a new report that provides a wide range of details on the Montana captive domicile and how to form captives in the state, which is a major captive domicile.

For example, a pure captive insurance company will not receive a license unless it has a paid-in capital and surplus of at least $250,000.

Capital and surplus requirements for other captives are $500,000 for an industrial insured captive or a risk retention group, $500,000 for an association captive insurance company, $500,000 for protected cell captives, or $250,000 if there are fewer than 11 cells and homogenous risk.

In addition, the capital requirements for reinsurance captives are half those for the same type of direct writing captives.

The report also notes that the Montana insurance commissioner "may require additional capital and surplus based on the type, volume, and nature of insurance business transacted."

The report also points out that the captive's capital and surplus can be "in the form of cash or an irrevocable letter of credit issued by a bank chartered by the state of Montana or a bank chartered by another state of approved by the" Montana insurance commissioner.

In 2022, Montana, which in 2001 passed legislation to allow the formation and operation of captives, had 268 captives. Those captives generated $494.4 million in gross written premium volume.

The Montana Captive Domicile Report 2023 is available on the MCIA website.