New VCIA Pres. Riding Captive Wave

The Vermont Captive Insurance Association's new president comeson board with some enviable “problems,” such as how to deal withrecord numbers of new captive insurers in the state, and thepossibility of the largest conference attendance ever.

Molly Lambert, who replaced Lisa Ventriss in May, faces herfirst VCIA conference this week in Burlington.

She said this will be a record-setting year for the state. Overthe 21 years Vermont has had captive legislation, the state haslicensed about 25 captives per year, she said. So far in the firsthalf of 2002, “we've already licensed 26 new captives, and thefourth quarter is normally the busiest quarter.”

She said that the captive industry is “very busy, and thosefamiliar with the industry know why. It's because the commercialinsurance market has hardened significantly, even before Sept.11.”

Consequently, captives are becoming “much more attractive to avariety of different companies,” she explained.

Ms. Lambert most recently served as secretary of commerce, acabinet position, for the state of Vermont. Within the agency sheoversaw the departments of economic development, housing andcommunity affairs, and tourism and marketing, she said.

She came on board VCIA with an understanding of captives andtheir importance to the state because one of her responsibilitieswith the department of economic development was to market the stateas a captive domicile, she explained.

Since the state's passage of captive legislation, “the increasein licensing has been extraordinary,” she said. “Now in 2002, $5billion in premiums run through Vermont and $12 million in premiumtaxes go to Vermont's general fund.”

As important as all this is to the state, she continued, “frommy position as secretary of commerce in community development, justas important were 1,000 good paying jobs for Vermonters. That's avery big number in the state of Vermont.”

VCIA, with a significant rise in membership–from 270 members afew months ago to 320–reflects the captive domicile's growth. Thisis “another indication of the vitality of this industry,” shenoted.

During the coming year, she said, the association has two maingoals. One is a focus on education.

“It is critically important that captive industry participantsremain very well informed” about changing laws, evolving uses forcaptives, and new industry trends. “Education at all levels isgoing to be a key part of VCIA's activities,” Ms. Lambert said.

The VCIA conference format includes both basic seminars andaccelerated courses. The education component will mirror thiseffort, she said.

The other emphasis, she said, is legislation at both the stateand federal levels. One focus, she said, is the effort to expandthe federal Liability Risk Retention Act of 1986, which would allowrisk retention groups to expand the types of insurance they couldwrite, excluding workers' compensation.

Ms. Lambert said that while the association is “monitoring thediscussion at the federal level,” VCIA is also “working with itspartners in Vermont's state government on some possible updates tothe captive statute.”

One thing Vermont has done “very well, which has kept it at thehead of the game in terms of domestic domiciles, is they haveconstantly reviewed and revised captive statues,” sheexplained.

This has been possible because of the “great receptivity on theside of state government regulators to constantly revise andimprove Vermont's captive statutes, to stay ahead of thecurve.”

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, August 12, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.