S.C. Captive Seminar Irks Vermont
By Caroline McDonald
NU Online News Service, May 14, 8:14 a.m. EST?A hard market trend toward captive insurers is spawning competition between states to be the captive domicile of choice.
A sign of the times is a two-day "Captive Redomestication Seminar," announced by the South Carolina Captive Insurance Association Inc. The meeting, to be held June 12-13 in Columbia, S.C., provoked a Vermont regulator to denounce it as something that is just "not done."
Clayton Ingram, director of business development for the South Carolina Department of Insurance, said though the seminar was the brainchild of the SCCIA, he is a scheduled speaker.
"Since we're the new players in the game and we weren't at the table before, people who located elsewhere may want to reconsider their move," he said.
Mr. Ingram said South Carolina "gets calls all the time" from companies interested in redomesticating. Much of that interest, he said, is from offshore relocations.
"For most of these groups there is really no advantage to being offshore anymore," he said. "Most of them have elected to be taxed as U.S. corporations anyway, and the time and expense of operating offshore have outweighed whatever positives there were in the beginning."
South Carolina, he said, has structured it's laws "to make it possible to do pretty much anything onshore that you can do offshore."
But Leonard Crouse, director of captive insurance for the Vermont department of banking, insurance and securities, is less than enthusiastic about the seminar's focus. "It's nothing that's ever been done in this business. Never," he said. "If a company wants to redomesticate, there is a reason for it. This sets a precedent and it's something that's not done."
Mr. Crouse continued that, "People go where they want to go" because they like the regulations, the location, "or the CFO wants to go to a certain spot. And what's South Carolina going to offer," he asked. "Lower taxes? No taxes? No regulation?"
He added that if the Vermont Captive Insurance Association were to consider hosting such a seminar, "it would definitely talk to me beforehand, because that's the way we operate."
If a captive already established in another domicile "were to call and ask me why they should go to Vermont I'd tell them, one-on-one," he explained. "But I'm not going to have a seminar saying move your captive from Hawaii or move your captive from Bermuda and come to Vermont. The brokers will bring those captives in."
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