CAPTIVE INSURANCE
Captive insurance companies are regulated under Title 33, Chapter 28, MCA, and ARM Chapter 6.6—Insurance Department; Subchapter 6.6.68.
Montana has become a leader in the captive insurance marketplace. Montana currently has nearly 300 domiciled captive insurance companies that have brought in over $17 million in premium tax payments since 2001, when captive legislation was enacted in the state.
The CSI is committed to further growth in the dynamic captive insurance market. The state’s streamlined and efficient regulatory process and our extremely knowledgeable team can help your company reach its goals. We’ve laid out everything you need to know to begin the process of domiciling a captive insurance company in our state.
Montana has a variety of captive types and business entity structures available for captive formations.
The procedures listed below should be followed to form a captive insurance company in Montana and to apply for a Certificate of Authority from the Montana Commissioner of Securities and Insurance:
- Prepare the documents needed for the application for a Certificate of Authority.
- Submit the application to the commissioner for review. Include a $200 application fee and a $300 license fee.
- Submit drafts of the business organizational documents with the captive insurer’s application for a Certificate of Authority. In drafting the organizational documents, the services of a local attorney may be desirable.
- Provide information concerning the expertise, experience, and character of the person or persons who will manage the captive insurer. Affidavits are required on directors, officers, and management personnel.
- Have your CPA complete the Application for Authorization as an independent certified public accountant.
- Have your actuary complete the Application for Authorization to Certify Loss Reserves and Loss Expense Reserves for Captives.
- If a Letter of Credit will be used for Capital & Surplus, click HERE to see a sample.
- The Montana insurance code authorizes the commissioner to obtain services to review the application for a captive insurer at the applicant’s expense. If the CSI determines that such services are needed, you will be required to submit an additional copy of the application materials to the reviewer and you will be notified of the cost.
- Montana captive insurers must file an annual statement, Section 33-28-107, MCA.
- Captive Application for Certificate Authority
- Biographical Affidavit
- Irrevocable Letter of Credit
- Service of Process: RRG
- Application for Authorization to Act as a CPA for a Montana Captive
- Application for Authorization to Certify Loss Reserves
- Montana Short Form Annual Statement
- Fiscal Year Filers—Montana Short Form Annual Statement
- Holding Company Forms
ANNUAL REPORT INSTRUCTIONS
- Electronic Premium Tax Filing Required for Captives—Please Read
- OPTins Filing Tips for Captive Insurers
- Risk Retention Group (RRG) Reporting Instructions
- Non-RRG Captive Reporting Instructions
1. When you log into OPTins to complete your premium tax return, you may be asked to report your annual statement type. This is referring to the type of annual report filed with the NAIC. If you are a captive insurer (non-RRG) select Not Required from the drop-down list, since you don’t have to file an annual statement with the NAIC.
2. You will be prompted to select a Montana tax filing type. The choices you will be given are Premium Tax, Captives, and Surplus Lines. Please select Captives. This will allow you to complete a captive premium tax return, rather than a premium tax return for another type of insurer.
CPA AUDIT REQUIREMENT
Montana administrative rules require that an independent certified public accountant, approved by the commissioner, audit the captive annually. The applicant must select an accountant who meets the requirements of the administrative rule. You may ask the Department if your CPA is currently approved. See 6.6.6801 through 6.6.6821 ARM.
CERTIFICATION OF RESERVES
Montana administrative rules require that loss reserves and loss expense reserves be certified by a Fellow of the Casualty Actuarial Society, a member in good standing of the American Academy of Actuaries, or an individual who has demonstrated his competence in loss reserve evaluation to the commissioner. The commissioner must approve the actuary. The applicant must select an actuary that meets the requirements of the administrative rule. See 6.6.6816 ARM.
ANNUAL STATEMENT FORM
Pursuant to Section 33-28-107(2)(a), MCA, each captive insurance company shall submit to the commissioner a report of its financial condition in a form and manner as required by the commissioner, verified by oath of two of its executive officers.
As required by Section 33-28-107(2)(c), MCA, each captive insurance company shall report using generally accepted accounting principles, unless the commissioner requires the use of statutory accounting principles.
Captive Risk Retention Groups must file an annual statement on or before March 1 using the annual statement blank adopted by the National Association of Insurance Commissioners (NAIC) for property-casualty insurance companies. This form must also be filed with the NAIC.
All captive insurers other than risk retention groups may file the Montana Short Form Annual Statement on or before April 1.
LOCATION OF CAPTIVE RECORDS
All books, records and other information necessary for a statutory examination should be located in Montana.Need more help?
Contact the Captive Insurance Team at 800.332.6148 | 406.444.2040 or captives@mt.gov.
DID YOU KNOW?
$5 MILLION
IS CONTRIBUTED ANNUALLY TO THE MONTANA ECONOMY FROM CAPTIVE INSURANCE