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Committee hears proposal to remove $100,000 premium tax cap for certain captive insurers
Summary
Senate Bill 60 would eliminate a $100,000 premium tax cap for a specific series business structure of captive insurers domiciled in Montana. The Commissioner of Securities and Insurance and industry representatives said the change would equalize tax treatment after a 2019 change removed the cap for protected cell captives.
Senate Bill 60 was presented to the House Business and Labor Committee to remove a $100,000 cap on premium tax for a certain form of captive insurer organization described in testimony as “series business unit” captives (often called series or “series business unit structures”).
Sen. Noland (sponsor) said the bill updates Montana’s captive insurance statutes to avoid inequitable tax treatment. Frank Cote, deputy insurance commissioner, explained that the 2019 Legislature removed the cap for protected cell captive companies but the statutes did not at that time remove the cap for the similar series business structures; the office wants the statute aligned to avoid legal challenges and inequitable tax treatment between similar entities.
A representative of the Montana Captive Insurance Association (witness Huth — spelled in the transcript multiple ways) said the association supports the bill and was available for questions. No opponents or informational witnesses requested to testify on the record during the hearing excerpt in the transcript. The committee closed the hearing and the sponsor indicated readiness to assign a House carrier.
