Nov. 1, 2001
Contact: Lucas Hamilton
State Auditor announces creation of captive insurance program Industry poised to bring economic development to Montana
State Auditor John Morrison recently announced the details of an economic development plan to attract captive insurance companies to Montana. He appointed John Huth to coordinate the department's initial captive recruitment efforts.
"The State Auditor traditionally has not played a role in economic development efforts in Montana," Morrison said. "But I believe every elected official has a duty to do what he or she can to reverse the downward trend of Montana's economy."
The 2001 Legislature passed a law allowing captive insurance companies for the first time to operate in Montana. A captive insurance company is a subsidiary established primarily to insure the risks of the parent company and its affiliates.
Captives don't interact with consumers in the same fashion as traditional multi-line companies so Morrison's office has been able to create a streamlined regulatory environment for them.
Captives traditionally have located in the east. In Vermont, the first state to allow captives, it's a $1 billion dollar a year industry. Vermont had nearly 75 percent of the U.S. market at the end of 2000 with 489 captive firms.
"This is Montana's opportunity to establish a niche as the premiere captive insurance location in the western United States," Morrison said.
The law requires Montana-based captives to locate their headquarters in Montana and hold an annual board meeting here.
"That will bring business leaders from all across the country to Montana and introduce them to all the state has to offer," Morrison said.
The average full-time position in the industry paid $46,000 a year in 1998. Jobs in the clean industry include business manager, legal, paralegal support and accounting staff.
Morrison said he hopes to have several captive insurance companies licensed by early next year.
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