Jan. 8, 2002                                                         Contact:Lucas Hamilton

Montana licenses first captive insurance company

       State Auditor John Morrison today announced the licensure of Montana's first captive insurance company. The license was presented to ALPS Reinsurance of Missoula, a wholly owned subsidiary of Attorneys Liability Protection Society.
      A captive insurance company provides a form of self-insurance in which a corporation or association organizes an insurance subsidiary to insure itself or its members. Captive insurance companies serve the insurance needs of the parent organization without the uncertainties of commercial availability and cost.
      "We are pleased to license ALPS Reinsurance as the first captive insurance company in Montana," said Morrison, Montana's commissioner of insurance. "This is a Montana company that until this year, had to be domiciled in Vermont."
       The 2001 Legislature passed a law proposed by Morrison, allowing captive insurance companies for the first time to operate in Montana. The law requires Montana-based captives to locate their headquarters in Montana and hold an annual board meeting here. 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.
      ALPS Reinsurance will pay a minimum premium tax of $5,000 to the state of Montana. Last year the insurance industry paid about $48 million in premium taxes to the state's general fund.
      The company will use the services of accountants, lawyers and actuaries in Montana.
      "I am hopeful that this will be a stimulus for economic growth in Montana," Morrison said. "We will be holding informational meetings around the state and will be working with the governor's office to promote this industry."
      Morrison said he hopes to license several captive insurance companies this year. His office plans to sponsor informational meetings in February in Missoula, Great Falls and Helena to discuss the new law with Montana businesses interested in insurance issues.