For years, Kansas has been the smallest captive domicile in the United States with just one licensed captive.
But that could be about to change, captive experts say.
"We are expecting some growth," Richard Ramos said earlier, when he was director of the Kansas Insurance Department's Financial Surveillance Division in Topeka.
A key reason for that optimism: the passage of legislation in early 2018 that updated the state's 20-year-old captive statute.
"We had a very outdated law," Clark Shultz said earlier, when he was assistant commissioner of the Kansas Department of Insurance. "We wanted companies in Kansas that want to set up captives to have the option of doing so in this state rather than having to go somewhere else," Mr. Shultz added.
The 2018 law made numerous changes to the captive statute. For example, the original law only allowed pure or single-parent captives. Under that legislative update, the law was revamped to also allow branch captives, special purpose captives, and association captives.
In addition, captives are now able to offer accident and health, life insurance, and annuities.
The 2018 law also allows captives to seek approval from the state insurance commissioner to insure risks of unaffiliated businesses—up to 5 percent of total written premiums.
Finally, the 2018 law bumps up the minimum capital and surplus requirements for single-parent captives to $250,000 from $100,000 and to $500,000 from $200,000 for association captives.
The changes in law, state regulators say, were driven by Kansas-based companies. "Kansas was approached by a few domestic companies that were interested in forming captives who also wanted to keep them in their home state," Mr. Ramos said.
Regulators also say that an objective in updating the captive statute was to increase the attraction of Kansas as a captive domicile.
"I helped pass the updates to the captive statutes when I served in the Kansas Senate and the goal then, as it is now, is to do everything possible to make Kansas an attractive place to do business," said Insurance Commissioner Vicki Schmidt. "I understand that these updates were just one of many considerations in starting a company, but Kansas is open for business and I welcome new entrants into the market," Ms. Schmidt added.
Aside from a new updated captive statute, there are other factors that could lead Kansas companies to set up captives in the state, regulators say.
"Kansas is a place of opportunity that offers surprising advantages for companies, including a low cost of living, vibrant rural and urban communities, and a business-friendly climate, not to mention an experienced and responsive insurance department that is rated number two in the country with regards to customer service and responsiveness," Mr. Ramos said.
"We are a state that is business friendly and we will go out of our way to help companies," Mr. Shultz added.