As a captive insurance company domicile, steady growth is an apt description for the state of Missouri.
The number of captives licensed in Missouri has increased by nearly 40 percent since 2015, with 74 captives at the end of 2020.
Captive premium volume has been more volatile. Last year's $3.5 billion in captive premiums in 2019—the most recent year figures are available—was about the same as in 2016, though down from $4.1 billion in 2018.
Missouri captive regulators expect more growth in the months ahead.
"This year with the hardening market I have already been contacted by several captive managers about possible applications," said John Talley, captive program manager for the Missouri Department of Commerce & Insurance in Jefferson City, Missouri.
Mr. Talley attributes Missouri's captive insurance company growth to several factors, including the state's location in the central part of the United States as well as the easy accessibility of captive regulators.
"We can quickly and easily be reached," Mr. Talley said.
Others agree with that assessment. "Regulators are very approachable and easy to work with," said Alan Fine, a partner with the accounting firm of Brown Smith Wallace LLP in St. Louis and president of the Missouri Captive Insurance Association.
Mr. Talley "is very responsive and clearly lays out what we need to do," adds Josh Miller, CEO of KeyState Captive Management in Las Vegas, which manages a couple of captives in Missouri for community banks, as well as dozens of captives in other domiciles for community banks.
At the same time, state lawmakers have played a key role in boosting the appeal of Missouri as a captive domicile through amendments to the state's 2007 captive statute.
"Lawmakers, generally speaking, have been very receptive to changes," Mr. Fine said, adding that prospective and current captive sponsors would more likely go to other domiciles if Missouri did not keep its captive statute up to date and attractive.
Those legislative changes go back many years. For example, legislation passed in 2013 authorized captives with segregated cells.
Missouri's captive insurance company premium taxes are competitive with other domiciles. For example, the annual tax on captives' premiums is 0.380 percent on the first $20 million in premiums, 0.285 percent on premiums between $20 million and $40 million, 0.190 percent on premiums between $40 million and $60 million, and 0.072 percent on premiums exceeding $60 million. The minimum annual premium tax is $7,500, and the maximum premium tax is $200,000.
Capitalization requirements vary by captive type. For example, single-parent and branch captives have to maintain capital and surplus of at least $250,000, with a $500,000 requirement for association and industrial insured captives.