Friday, July 13, 2007
Contact: Jessica Robinson, 573-751-0290
Blunt Signs Legislation to Create Jobs, Promote Economic Development
JEFFERSON CITY–Gov. Matt Blunt today signed Senate Bill 215 estimated to add as much as $10 million to the state's revenue over the next three years by allowing the formation of captive insurance companies in the state.
"This action will have a positive impact on our state's economy by reducing costs to Missouri businesses, attracting new businesses to this state and creating more jobs for Missourians," Gov. Blunt said. "The new policy supports and empowers the continued economic growth of Missouri while enhancing the state's budget without any increases in tax rates."
Captive insurance companies are formed by a parent company to insure all or part of the parent company's or affiliate company's risks. The captive can provide health, accident, life, property or liability insurance coverage. These insurance companies have several advantages including lower costs and taxes. By self-insuring, businesses eliminate some administrative costs found in the private market. They also pay lower taxes by only having to pay one state's taxes rather than every state where they might have a presence.
"This is a wonderful economic development opportunity for our state," Sen. John Loudon said. "The new law will create new jobs while helping Missouri companies control costs and increase profits, and it has the potential to attract billions of dollars of new business."
"Allowing the formation of captive insurance companies in Missouri will provide a great economic boost to our state by generating revenue through taxes on premiums, much like what has been seen in Vermont and South Carolina," Rep. Brian Yates said.
Estimates indicate 50 or more new captive insurance companies could be formed in the state over the next three years adding as much as $10 million to the state's revenue from taxes and fees paid by these companies.