Vermont Wins Top
U.S. Domicile for Captive Insurance for Third Year
Captive Review Magazine Unveils Industry Awards
Montpelier, VT - The State of Vermont has again been awarded the top U.S. Domicile for “an innovative and competitive environment for captives to flourish.” This is the third year that the State of Vermont has been honored with this award, which was presented by Captive Review Magazine during the U.S. Captive Services Awards on August 10. The award describes Vermont as having a “depth of knowledge and expertise among Vermont’s vast team of regulators,” and stating “despite being an established jurisdiction, Vermont continues to review its statute on an annual basis to ensure it continues delivering efficiency and value.”
“Our staff is the best in the business and this award is a not only a reflection of them, but also of the quality companies that choose to domicile in Vermont,” said Vermont Governor Peter Shumlin.
“Vermont continues to work hard to keep its reputation as ‘the gold standard’ of domiciles,” said Dan Towle, Director of Financial Services for Vermont. “We are proud to be a three time winner of the Top U.S. Domicile.”
The State of Vermont continues to lead the captive insurance industry in the number of Risk Retention Groups (RRG) and gross written premium for RRGs to make up over 60% of all RRG gross premium written. This is now more than eight times its next closest competitor. Overall gross written premium for all of Vermont’s captives exceeded $25.5 billion.
“We have never rested on our laurels in the quest to better operations and increase efficiency through firm, yet flexible regulation,” commented David Provost. “This top U.S. Domicile for Captive Insurance award is in part a reflection of that commitment.”
Vermont has continued to take a leadership role in all areas of captive insurance passing new legislation in the 2015 session strengthening Vermont’s captive legislation in a variety of areas including groundbreaking changes to the investment guideline to allow marketable securities along with cash, trusts and letters of credit to meet the minimum capital requirement.
Vermont is also off to a strong start to captive licenses in 2015. In July of this year, the Vermont Department of Financial Regulation reported the licensing of 14 new captives. The newly licensed captives include 7 Pure, 3 Risk Retention Groups, 1 Special Purpose Financial Captives, 1 Industrial Insured, 1 Sponsored and 1 Association. Five of the new captives have been redomesticated from other domiciles and three of them are in the Healthcare Sector.
Captive insurance is a regulated form of self-insurance that has existed since the 1960’s, and has been a part of the Vermont insurance industry since 1981, when Vermont passed the Special Insurer Act. Captive insurance companies are formed by companies or groups of companies as a form of alternative insurance to better manage their own risk. Captives are typically used for corporate lines of insurance such as property, general liability, products liability, or professional liability. Growth sectors of the captive insurance industry include professional medical malpractice coverage for doctors and hospitals, and the continued trend of small and mid-sized companies forming captive insurance companies.