/
Missouri Missouri

Missouri - PowerPoint Presentation

pamella-moone
pamella-moone . @pamella-moone
Follow
387 views
Uploaded On 2017-07-14

Missouri - PPT Presentation

The Captive Domicile Close to Home John F Rehagen CFE Captive Program Manager Kansas City Area RIMS November 9 2010 Missouri Captive Insurance Background Missouri Captive Law Advantages ID: 569997

missouri captive 2010 insurance captive missouri insurance 2010 nov slide law companies state tax service premium advantages captives business

Share:

Link:

Embed:

Download Presentation from below link

Download Presentation The PPT/PDF document "Missouri" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.


Presentation Transcript

Slide1

Missouri The Captive Domicile Close to Home

John F. Rehagen, CFECaptive Program Manager

Kansas City Area RIMS

November 9,

2010Slide2

Missouri Captive Insurance

Background Missouri Captive Law Advantages

Future Expectations

Missouri Captive Insurance:

Nov. 9, 2010

2

SLIDESlide3

Background

History of the Missouri Program

Law Enacted August 2007

Collaboration of Midwestern Business, Insurance Companies and Missouri Government

They wanted their captive operations close to home

Seen as an economic development tool by the state

Originally signed by Republican Governor

Expansion signed by current Democratic Governor

Missouri Captive Insurance:

Nov. 9, 2010

3

SLIDESlide4

Background

History of the Missouri Program

9 captive licenses issues as of 9/30/2010

First Pure Captive licensed, November 2007

First Special Purpose Captive Licensed, December 2007

First Association Captive Licensed, April 2009

Expect as many as 15 licenses issued by YE 2010

Premium Written by Captives Exploding

$30 Million in 2007

$123 Million in 2008

$1.1 BILLION in 2009$1.6 BILLION estimated in 2010

Missouri Captive Insurance:

Nov. 9,

2010

4

SLIDESlide5

Background

The Missouri Department

Receives no taxpayer money, funded by fees paid by its licensees and regulated entities

More than 500,000 members of Missouri’s workforce are licensed by the department

More than 7,000 companies are licensed or registered with the department

Full time staff of 534

2009 FY budget $36.9 million

Missouri Captive Insurance:

Nov. 9,

2010

5

SLIDESlide6

Background

The Missouri Department

Director appointed by the Governor an industry expertSeven divisions with long-term leaders and employees in place

Tasked with enforcing the laws and regulations of the state

Mission: To efficiently and effectively encourage a fair and open market for consumer service industries.

Key objectives: Protect consumers, encourage competitive marketplace and enhance state-based regulation.

Missouri Captive Insurance:

Nov. 9,

2010

6

SLIDESlide7

Background

The Captive Team

Department Director: John M. Huff formerly with Swiss Re

Division Director: Fred Heese CPA, CFE, 25+ Experience

Captive Program Manager

: John Rehagen, CFE

Support Staff

Captive Financial Analyst- AFE

Reinsurance Examiner- CPA,

ARe, 20 + Experience

Life & Health Actuary- 30 + ExperienceP&C Actuary- 30+ Experience

Division Counsel- 25+ Experience

Primary Consultant- Milliman, an experienced international firm

Missouri Captive Insurance:

Nov. 9,

2010

7

SLIDESlide8

Missouri Captive Law

Formation Types

Pure CaptiveAssociation Captive

Industrial Insured Captive

Branch Captive

Special Purpose Life Reinsurance Captive

Missouri Captive Insurance:

Nov.

9

,

2010

8

SLIDESlide9

Missouri Captive Law

Requirements

Pure/Branch CaptivesInsures owners, affiliates and unaffiliated controlled entities

Minimum capital and surplus $250,000

GAAP Financials

Stock, Nonprofit or LLC

Industrial Insured Captive

Insurers members of the industrial insured group

Minimum Capital $500,000

GAAP Financials

Stock, Mutual, LLC or Reciprocal

Missouri Captive Insurance:

Nov.

9

,

2010

9

SLIDESlide10

Missouri Captive Law

Requirements

Association CaptivesInsures association members

Minimum capital and surplus $750,000

GAAP or SAP Financials

Stock, Mutual, LLC or Reciprocal

Special Purpose Life Reinsurance Captive

Insurers life insurance company affiliates

Minimum Capital $250,000

SAP Financials

Stock, MO Statutory Close Corp, LLC or other form approved

Missouri Captive Insurance:

Nov.

9

,

2010

10

SLIDESlide11

Missouri Captive Law

Ongoing Requirements

(Typical with all domiciles)Principal place of business in Missouri

Annual board meeting in the state

Resident incorporator and board member

Resident agent for service of process

Use of approved service providers

Material changes in business plan, dividend payments, loans or investments in affiliates and organization changes require prior approval.

Annual tax filing

Annual financial filing

Renewal Fee (Which is deductible from premium tax)

Audited financials and reserve certification.

Missouri Captive Insurance:

Nov.

9

,

2010

11

SLIDESlide12

Missouri Captive Law

Captive Fees

Application/Licensing Fee $7,500Annual Renewal Fee $7,500

Fees are fully deductible from premium tax, no other hidden fees

One time Actuarial Application Review Fee $4,000 maximum

Payable to the actuarial review firm assigned by the Department

Premium Tax Rates

Millions of $ Direct Premium Assumed Premium

0-20 0.380% 0.214%

20-40 0.285% 0.143%

40-60 0.190% 0.048% 60+ 0.072% 0.024%

Minimum Tax $7,500, maximum $200,000

Don’t forget to deduct annual fees, many captives pay no premium tax

Missouri Captive Insurance:

Nov.

9

,

2010

12

SLIDESlide13

Missouri Captive Law

Similarities with other Domiciles

Very low tax rates

Formation types

Minimum capitalization levels

Application requirements

On-going requirements

Coverages allowed

Missouri Captive Insurance:

Nov.

9

,

2010

13

SLIDESlide14

Missouri Captive Law

Differences from other Domiciles

Fees deductible from premium tax

Only one fee, no additional fees for each filing

Fee structure allows responsiveness and growth

Alien redomestication stated in law

No resident captive manager required

Self management allowed in some cases

Does not allow Cell or RRG’s (Less NAIC/IRS scrutiny)

LOC’s Surety Bonds & Financial Guarantee Policies admitted for SPLRC

60 day decision required by SPLRC, others 30 or less

Biggest difference we have an office right here in Kansas City

Missouri Captive Insurance:

Nov.

9

,

2010

14

SLIDESlide15

Missouri Captive Law

Recent Changes

Revised Effective August 2009

Removed restrictive investment requirement.

Standardized number of resident incorporators for all types

Added reciprocal organizational type

Added Alien redomestication

Eased admittance requirement for SPLRC assets

Solidified department funding to allow for growth

Changes encouraged continued growth and made Missouri more attractive not only for companies out of state but in state as well.

Missouri Captive Insurance:

Nov.

9

,

2010

15

SLIDESlide16

Missouri Advantages

Location

Central Location, close to the majority of the countryDirect flights from every major city in the country

Borders 8 states and has 20 relative next door neighbor states

Department utilizes offices in KC, STL and Jefferson City

Direct access to the decision makers at the department who will come meet with you if needed.

Allows for prompt attention to your captive needs

All this allows for efficiency and reduces business cost

Missouri Captive Insurance:

Nov.

9

,

2010

16

SLIDESlide17

Missouri Advantages

Other Advantages

Large commercial carriers in state unlike most captive domicilesAllows for potential reduction in fronting carrier collateral.

Captives admitted, not subject to self procurement tax in Missouri, eliminate fronting cost entirely.

Offshore captives can redomesticate

Remove negative perception related to offshore captive activities

Eliminate need for separate SAP statements and auditor fees

Lower cost of living here, reduce service provider fees

Recognition as a good corporate citizen keeping dollars at home

Local captive service providers and consultants right here ready to help you make your captive a success.

Missouri Captive Insurance:

Nov.

9

,

2010

17

SLIDESlide18

Missouri Advantages

Companies interested in Missouri

Large National and International CompaniesBanks and Financing Companies

Privately Held and Midsized Companies

Professional/Trade Associations

Owners of Existing Captives- Missouri subsidiary or Branch less cost

Redomestication- Moving Captive Closer to Home

Companies with significant exposures in Missouri

Large Life Insurance Companies

Missouri Captive Insurance:

Nov.

9

,

2010

18

SLIDESlide19

Missouri Advantages

Proposed uses for a captive

Nearly all coverages are allowedFund Deductibles

Commercial auto, property and liability

Excess Workers Compensation

Warranty

Product recall

Franchisee and Distributor cover

Business Interruption

Cover exclusions

Performance Bonds

TRIA

Credit Insurance

Med Mal

E&O

Employee Benefits

Access to Iowa FHLB loans

Reduce surplus strain from term life reserves

Missouri Captive Insurance:

Nov.

9

,

2010

19

SLIDESlide20

Missouri Advantages

Licensing Process

(usually 30 days or less)Discuss your captive plans with the Department

Complete the application and provide requested documents

Licensing Fee, Draft Articles and Bylaws, Bio’s, Business Plan, Feasibility Study, Proforma Financials (Example docs are available to aide the applicant)

Department reviews documents and issues a certificate of General Good

Certificate and other organization docs are filed with the Missouri Secretary of State to form the captive insurance company

Department consulting actuary will review and issue an opinion, which is paid for by the applicant

Place the minimum capital and surplus in the captive

Department issues the license

Place additional recommended capital if any into captive and commence business

Missouri Captive Insurance:

Nov.

9

,

2010

20

SLIDESlide21

Missouri Advantages

Redomestication Process

Basically a streamlined licensing process to change address

Discuss your captive plans with the Department

File the application material with some differences

File draft articles of domestication which are amended to meet Missouri law

In lieu of feasibility study simply provide the last three years annual statements, current year quarterly statements, most recent audit and examination if any

Provide a no objection letter from existing domicile indicating no regulatory issues

In most cases no outside actuarial review will be required.

Department reviews documents and issues a certificate of General Good to request that domesticating company continues its legal existence in Missouri

Certificate and other organization docs are filed with the Missouri Secretary of State to domesticate the captive insurance company

License will be issued upon certification of domestication

Foreign or Alien captives are allowed to redomesticate

Missouri Captive Insurance:

Nov.

9

,

2010

21

SLIDESlide22

Future Expectations

2010 Outlook and beyond

Interest in redomestication from both on shore and offshore domiciles has spiked as a result of the recent changes in the law

Currently three additional applications are under review, more expected

Several Missouri companies are in the feasibility stage

Several Midwestern companies are in the feasibility stage

Future plans for several Insurance Companies include more SPLRC’s

Continued steady increase in new licenses issued each year

Continued steady increase in premium written each year

Continued increase in local service providers

Continued benefits to our local economy

Missouri Captive Insurance:

Nov.

9

,

2010

22

SLIDESlide23

Future Expectations

Captive Insurance Association

Leading service providers from around the country recently organized the Missouri Captive Insurance Association

Association intents to be a means for service providers to network among themselves and captive owners to publicize their services

Plans to market the Missouri Captive Program across the country

Intends to develop relationships with other Captive Associations to provide access to high quality training and current captive information

Anticipates working closely with state government to keep the Missouri captive law attractive

Looking for more membership to help promote the benefits of captive insurance in Missouri

Interested in learning more, email the Executive Director at

mocaptive@gmail.com or visit their website at

mocaptive.com.

Missouri Captive Insurance:

Nov.

9

,

2010

23

SLIDESlide24

Future Expectations

Missouri’s vision is to become the leading domicile in the Midwest

Location, simple processes and an updated law is making it happen

The Department is experienced with stable leadership

The state has embraced captive insurance

Missouri offers unique opportunities

Using our Midwestern work ethic and common sense approach

Listening to applicants and working with them on their plans

The law was designed for local businesses like yours

Let’s talk about how you can benefit by keeping your captive close to home

Questions???

Missouri Captive Insurance:

Nov.

9

,

2010

24

SLIDESlide25

Contact us

John F. Rehagen,

CFE

Captive Program Manager

Missouri DIFP

301 W. High St., Suite 530

Jefferson City, MO 65101

Phone

:

573-522-2563 Fax: 573-751-5888

E-mail: John.Rehagen@insurance.mo.gov

Missouri Captive Insurance:

Nov. 9,

2010

25

SLIDE