In an effort to entice more captive insurers to operate within its borders, Montana enacted a bill, HB 106 (the “Bill”), at the end of March that reduces the burdens for forming a captive insurer in the state.
Specifically, the Bill reduces the start-up costs for new captives by exempting them (if they are in existence for less than two years) from costly risk based capital reporting and prorating the minimum premium tax amount. The old legislation required payment of the full minimum premium tax amount, even in the case where the captive was formed at the end of the year. The Bill also makes it easier to form a Montana captive by reducing the number of required organizers from three to one. Finally, the Bill also expanded the lines of business that captives can write in Montana by adding surety and marine insurance to the list of acceptable lines.
