Vermont: Another Record Signing Captives

By Caroline McDonald

NU Online News Service, Jan. 19, 1:52 p.m. EST?Vermont set another record as a captive domicile in 2003 by licensing 77 captive insurers, according to the Vermont Banking, Insurance, Securities and Health Care Administration.[@@]

Last year's licensees were seven more than the 2002 record of 70. There are now a total of 674 captives domiciled in Vermont.

The new captives represent every form available in Vermont with the majority being pure captives.

Nineteen new risk retention groups were formed, with industrial insureds, sponsored and association captives rounding out the new 2003 licensees. Gross written premium in 2003 is expected to be $8.5 billion, up from $7 billion in 2002, the department said.

Leonard Crouse, Vermont's Deputy Commissioner of Captive Insurance, told National Underwriter, "We're a little ahead of last year, so it's another bounty year."

He added that the new licensees were "mostly traditional captives and we saw a lot of retention group activity. Overall, we'll end up licensing close to 20 risk retention groups." The RRGs, he said, are mostly medical malpractice and hospital liability.

"We've tried our best to be careful, do a good job, and write those that make good business sense," he added.

Mr. Crouse said in a statement that two captives were redomesticated from another state, and that a pure captive was converted to a risk retention group.

Parent companies of the licensed captives came from hospitals, manufacturing sectors, financial services, religious organizations, hotels, sports teams, construction, airlines and fast food. "We have several applications in the pipeline," Derick White, director of captive insurance, said in a statement. "2004's pace is not slowing down one bit."

Interest in Vermont as a domicile was very high on several recent recruitment trips, the department said.

"Vermont's solid reputation for consistent and knowledgeable regulation, world-class professional support services and accessible government officials is at the heart of our continuing success," said Vermont Gov. Jim Douglas. "We will continue to make sure that we keep pace with the changing needs of the industry and will do whatever it takes to retain our leadership position."

The growth of the overall industry is a clear indication of the value captive insurance offers. "It is fair to ask whether we can call this industry the alternative risk market anymore," said Dan Towle, Vermont's director of financial services. "It may well be becoming the mainstream choice for risk managers,"

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Vermont: Another Record Signing Captives

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