Missouri has granted the state’s first license for a special purpose life reinsurance captive to RGA Reinsurance Company.
Executives at RGA Re, Chesterfield, Mo., a unit of Reinsurance Group of America Inc., St. Louis, were not immediately available for comment.
Officials at the Missouri Department of Insurance, Financial Institutions and Professional Registration say S.B. 215, the 2007 bill that set up the captive license program, creates a new option for insurers and could generate as much as $10 million in revenue over 3 years.
Special purpose life reinsurance captives help finance life insurance reserves by assuming life insurance business from corporate life insurance parent companies or affiliates.
Missouri is expecting to sell many captive licenses to life insurers that want to free some of the reserves backing term life insurance policies, according to John Rehagen, the department’s captive program manager.
Missouri will be charging insurers from $7,500 to $200,000 in premium taxes for each special purpose entity that they establish.
Each special purpose life reinsurance entity also must pay the state insurance director a $7,500 annual licensing fee and a $7,500 annual renewal feel, according to the text of S.B. 215.
Missouri is limiting access to the program to life insurers that hold at least 35% of their assets in Missouri, either directly or through a financial institution.