The Montana State Legislature only meets for two months every two years so getting a bill passed requires a certain amount of precision. So it is particularly impressive that legislation to significantly improve the state’s captive insurance statute cleared the House and Senate by near unanimous votes and is expected to be signed into law by the governor.
Among other things, the legislation allows for the formation of incorporated cell and special purpose captives, which will make Montana one of the most progressive captive domiciles in the United States.
The interesting backstory is the amount of meaningful consultation that took place between industry proponents and key regulators within the state auditor’s office in developing the legislative language. There was genuine push and pull over the course of several meetings spanning several months. The final product met industry’s objective in creating new opportunities for captive formations, while incorporating sufficient safeguards to provide the regulators with a level of comfort.
We will now be watching to see if companies take advantage of the new law.
In related news, an incorporated cell captive bill is now pending in the Vermont state Legislature. Perhaps they were inspired by Montana.
The long slog continues in South Carolina to push through captive legislation dealing with incorporated cell captives and other updates to the statute there. The outcome still remains uncertain but headwinds seem to prevail.
Rounding out our domicile legislative round-up, a captive bill has been introduced in the Tennessee Legislature that was put together by taking the best provisions from captive laws in multiple domiciles. It’s too early to say whether the legislation will pass this year, but if it does Tennessee is sure to attract national attention.
A new era of captive regulatory structures seems to be emerging across the country. Will our industry’s “big thinkers” be up to the challenge on delivering the next generation of innovative ART programs to prove the potential is real?