Consumer Information

Industry Information


Commissioner's Corner

Office of the Commissioner of Securities and Insurance
840 Helena Ave.
Helena, Montana 59601

(800) 332-6148
(406) 444-2040

(406) 444-3497
(406) 444-3413

(406) 444-3426

Captive Insurance
Montana: Naturally Captivating

History of Montana Captive Laws

The 2001 Legislature passed a law allowing captive insurance companies to operate in Montana (Montana Code Annotated (MCA) Title 33, Chapter 28.  A captive insurance company is a specialized company established primarily to insure the risks of a parent company or members of an association.  They serve the insurance needs of the parent organization or association without the uncertainties of commercial availability and cost.  They provide an insurance alternative for businesses and organizations, which is particularly important during times of a hard insurance market when companies are looking for options.

The law requires Montana-based captives to locate their headquarters in Montana and hold an annual board meeting here.  Captives do not interact with consumers in the same fashion as traditional multi-line companies so the CSI office has been able to create a streamlined regulatory environment for them.

The captive insurance industry provides significant economic benefit to Montana. An infrastructure of professional service providers (managers, accountants, lawyers, actuaries) has developed to support the industry. To date, 155 captive insurance companies have chosen Montana as their domicile. Captive insurers domiciled in Montana provide insurance to rural hospitals, nursing homes, doctors, commercial trucking companies, contractors, and others. Premium tax collections have totaled $5.2 million since the inception of captive legislation in 2001.  Two captive management firms have been established in Montana to provide professional services.  Long-term benefits to Montana include the potential for new jobs, an expanded tax base and increased economic activity.

In 2011, the Montana Legislature passed important changes to the law that allows for incorporated cells within a protected cell captive insurance company.  The new law also created a special purpose captive licensing category and lowered the minimum capitalization requirement for association captives from $750,000 to $500,000.

Steps to Form a Montana Captive Insurance Company

The procedures listed below should be followed to incorporate a captive insurer in Montana and to apply for a Certificate of Authority from the Montana Commissioner of Securities and Insurance:

  1. Prepare the documents needed for the application for Certificate of Authority. 
  2. Submit the application to the commissioner for review.  Include a $200 application fee and a $300 license fee.
  3. Prepare the documents needed to incorporate the insurer.  Drafts of these documents must be submitted with the application.  The services of a local attorney may be desirable. 
  4. Provide information concerning the adequacy of the expertise, experience, and character of the person or persons who will manage the captive insurer.  Affidavits required on Directors, Officers and Management Personnel.
  5. Have your CPA complete the Application for Authorization as an Independent Certified Public Accountant.
  6. Have your actuary complete the Application for Authorization to Certify Loss Reserves and Loss Expense Reserves for Captives
  7. If Letter of Credit will be used for Capital & Surplus, see sample.
  8. 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 commissioner 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.
  9. The Department may perform an organizational examination in advance of or as soon as possible after you receive the Certificate of Authority and have capitalized the captive (6.6.6803 ARM).  The cost of this examination will be borne by the applicant.
  10. Montana captive insurers must file an annual statement, Section 33-28-107.

If you have any questions regarding captive insurance companies in Montana, please contact Steve Matthews at 406-444-4372 or at

Montana Captive Insurer Application Instructions and Forms

Financial Regulation
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.

Review Firm
If it is considered necessary, the commissioner may have the application reviewed by outside experts, with the costs of the review paid by the applicant. The outside review is of an advisory nature only and the commissioner will make final approval or disapproval of an application.

Annual Statement Form
Pursuant to Section 3-28-107(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.

Pure, Association, and Protected CellCaptive Insurance Companies may file the short form financial on or before April 1. The short form financial on a GAAP basis may be downloaded from the list of forms below.  Any differences between the annual statement and the CPA audit need to be reconciled and the reconciliation must be included in the notes to the financial statements within the CPA's audited financial report.

Location of Captive Records
All books, records, and other information necessary for a statutory examination should be located in Montana.

Forms, Statutes & Rules