On June 10, 1997, Governor Angus King signed legislation allowing captive insurance companies to be domiciled in the State of Maine. The law will become effective in September. Captives in Maine may write all property/casualty lines except personal auto and homeowners. Also allowed are credit life and health, marine, surety and title insurance. In addition to the risks of parent and affiliated companies, Maine captives may also insure the risks of other companies with which the parent or affiliates have a contractual relationship ("controlled unaffiliated business"). The capital and surplus requirements are identical to those of Vermont (Pure: $250,000, Association: $750,000, Industrial Insured/RRG: $500,000). Confidentiality provisions in the statute protect licensing submissions, annual reports, and examination documents.

Maine’s statute offers the following additional advantages:

• .375 of 1% tax rate on first $20,000,000 of direct premium;
• $4000 minimum tax;
• Low start up costs with no charge for initial actuarial review ($1000 filing fee plus $100 issuance fee--Maine’s Bureau of Insurance has actuaries on staff);
• Streamlined application process and lower licensing fees for existing captives redomesticating to Maine (for redomesticating companies filing fee is only $500);
• Low annual fees ($100);
• Allowance of "Pure Non-Profit Captive Insurance Companies."

The Maine statute requires an in-state office and an in-state annual meeting. It should be noted that Maine’s largest city, Portland, is an active commercial center offering an excellent business infrastructure. Portland is only 100 miles from Boston and is easily accessible by air. The Portland International Jetport offers 75 daily departures with direct flights to Albany, Chicago, Cincinnati, Newark, Laguardia, Philadelphia, Pittsburgh, Washington National, Dulles, Hartford and Boston. Although a newcomer to the captive insurance industry, Maine already has a well developed insurance community including numerous resident commercial carriers, self-insured entities and knowledgeable service providers. Several nationally known captive management companies have already expressed interest in beginning operations in Maine.

The chief regulator at Maine’s Bureau of Insurance who will be handling captive insurance companies is Joel Thomsen, CPA. Mr. Thomsen is the Director of the Bureau’s Financial Analysis and Self-Insurance Division. He and his staff are proud of the positive reputation the State has developed regulating self-insured groups and risk retention groups, and hope to develop a similar working relationship with the captive insurance industry.

Finally, in addition to its competitive statute, accessibility, infrastructure and positive regulatory environment, Maine hopes that its "Vacationland" image, including its beaches, rocky coastline, islands, mountains, sailing, fishing, golf, hiking, skiing, and, of course, famous Maine lobster, will present an attractive alternative to companies selecting a captive domicile.

For more information about domiciling in Maine, contact Richard Suter at 207-781-4696, or by e-mail at info@maineadr.com