NU Online News Service, Jan.7, 3:30 p.m. EST
Vermont officials reported that despite the weak economy last year growth continued strong for the licensing of captive insurers in the state.
According to data released by the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) 39 captives were licensed bringing the total licenses issued to 878.
Vermont is the largest captive insurance domicile in the U.S. and the third largest in the world, and it is closing in on "the 900-license milestone," BISHCA noted.
"A strong and growing captive industry is good for our economy," said Vermont Gov. Jim Douglas. "That this industry is growing in Vermont, even during this difficult time for our economy, is a testament to the hard work of our economic development officials and the professionals at BISHCA. It also demonstrates our state's economic potential when we put in place policies that make us competitive in an industry or sector."
The number of captives licensed in 2009 was the sixth highest tally of captives in Vermont's 29-year history as a captive domicile.
"In today's market some companies are finding it more advantageous to find ways to save a dollar, rather than it is to earn a dollar, and a captive can provide a mechanism to do that," said Dan Towle, Vermont's financial service director in the Department of Economic, Housing and Community Development.
The new captives formed include 28 pure captives, five new risk retention groups, four special purpose financial captives (SPFC), one sponsored captive and one industrial insured captive, bringing the total number of licenses issued in Vermont to 878.
"2009 was a very good year for captive growth," said David Provost, Vermont's deputy commissioner of captive insurance. "We continue to see a lot of quality captives with steady activity across all lines, especially in healthcare, financial services and construction. I am optimistic that 2010 will be another good year for captives in Vermont."
Some of the companies in the class of 2009 include: Comcast, Morgan Stanley, Swiss Re, the Empire State Building, Peabody Energy, Planned Parenthood and Turner Construction.
Captive Insurance Companies formed by the health care industry continues to be one of Vermont's fastest growing sectors. New health care captives in 2009 include: Centra Health, Carilion Clinic, Saint Mary's Hospital & Medical Center, Crystal Run Health Care, ENT & Allergy Associates and the Children's Mercy Hospital.
"Interest in captives for the healthcare industry remains strong and we expect to see more growth in this sector," said Mr. Towle.
Gov. Douglas promised that, "Vermont will continue to take steps to maintain its reputation as the gold standard of domiciles," he said. "While many of our domestic competitors have reduced their commitment to promoting and regulating captives, Vermont is continuing to invest in this valuable sector of our economy."
Vermont captives had $16 billion in gross written premium estimated for 2009.
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