In business since 1981, with a total of 831 licensed captives and premium volume of $15.3 billion in 2007, Vermont remains by far the largest U.S. captive, and indeed, one of the largest worldwide.

So far this year, eight captives have been licensed, noted David F. Provost, deputy commissioner of Captive Insurance Division for the Vermont Department of Banking, Insurance, Securities & Health Care Administration. He succeeded Leonard Crouse on June 1, who served as Vermont's captive regulator for 18 years. (See related story on this page.)

"It's been a pretty slow year, but a lot of that is due to the IRS," said Mr. Provost, referring to an initiative the Internal Revenue Service was considering--and has since abandoned, thanks in part to lobbying by The Vermont Captive Insurance Association--that would have negatively altered the tax treatment for self-insurance.

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