The Montana Captive Insurance Association, Inc. (MCIA) said thata measure passed by the legislature that eases requirements forcaptive operations should strengthen the state's position as acaptive domicile.

HB160 awaiting the signature of Gov. Brian Schweitzer, was givenfinal approval by the House March 9 on a 47-1 vote. MCIA said theyexpect Mr. Schweitzer to sign it before the end of the month.

Under the new law, Montana-licensed captives will be able writesurety and marine insurance. The maximum premium tax remains cappedat $100,000 per year, with a pro-rated payment schedule nowapplicable for first year captive insurance companies subject tothe minimum tax to help reduce front-end organizational costs.

The bill also codifies the commissioner's authority to waive therisk based capital (RBC) report for risk retention groups that havebeen in existence for less than two years. With regard to theformation of captives, the number of required organizers has beenreduced from three to one.

Providing additional flexibility for RRG investments, the lawgives the commissioner discretion to approve up to 20 percent ofadmitted assets in rated credit instruments in any one investmentthat meets certain statutory requirement for RRGs with totaladmitted assets of less than $5 million.

Steve Matthews Montana's captive coordinator and chief financialexaminer, said in an interview earlier this month that the domicilelicensed eight captives in 2008, and lost two, compared with 10licensed in 2007. The state has a total of 36 captives, 11 of whichare risk retention groups. As of early March, he said the domicilehad licensed two captives, making 2009, so far "a normal start forus."

MCIA, a trade association representing the Montana captiveinsurance industry, has scheduled a discussion of the new law atits Spring Seminar, scheduled April 1-2, in Helena, Mont. Thegroup's annual conference is set for July 21-23, in Whitefish,Mont. Additional information is online at www.mtcaptives.org.