January 26, 2015
Vermont licensed 16 new captives in 2014, according to data released by the Vermont Captive Insurance Division. The new captives were made up of 10 pure captives, two sponsored, two special purpose financial insurers, one association and one Risk Retention Group. Two new captives were redomesticated from Bermuda and Delaware.
Growth in 2014 was down from previous years attributed primarily to the prolonged soft market and added competition by other US States. Despite fewer formations, gross written premium continued to grow with a projected $29.8 billion, up from $27.5 billion in 2013 already the most of any captive insurance domicile.
"2014 was another good year for captives in Vermont," said Vermont Governor Peter Shumlin. "We welcome all of the new captives to the gold standard of domiciles."
"The quality of Vermont's 2014 licensees continues to be outstanding," said Dave Provost, Vermont's Deputy Commissioner of Captive Insurance. "Vermont's primary focus is licensing quality companies regardless of market conditions. Much of the activity across other jurisdictions is driven by small 831b companies which is not a core market for Vermont," said Provost.
New captives were licensed in healthcare, insurance, financing, manufacturing, real estate, technology, religious institutions and mining. The strong diversity of licenses were highlighted with three in healthcare. "The continued formation of hospitals and doctor's groups setting up captives in Vermont has been a very positive trend that we expect to continue," said Dan Towle, Vermont's Director of Financial Services. "Hospitals maintain a high interest in forming their captive on-shore and in Vermont."
The newly licensed captives in healthcare include Drexel University, Physicians Insurance a Mutual Company and Emergency Physicians Medical Group PC & AF.
Other notable captives in the class of 2014 include Union Carbide Corporation, AON Risk Services Companies, Inc., Sazerac, Swiss Re Life & Health America Holding Co. and MasterCard International Incorporated.
2014's new licensees brings Vermont overall total licenses to 1029 with 581 active captive insurance companies. An active pipeline of prospective captive insurance companies is already underway for 2015.
Captive insurance is a regulated form of self insurance that has been around since the 1960's, and has been a part of the Vermont insurance industry since 1981, when Vermont passed the Special Insurer Act. Captive insurance companies are formed by companies or groups of companies as a form of alternative insurance to better manage their own risk. Captives are typically used for corporate lines of insurance such as property, general liability, products liability, or professional liability. Growth sectors of the captive insurance industry include professional medical malpractice coverage for doctors and hospitals and the continued trend of small and mid-sized companies forming captive insurance companies.
For more information on Vermont's captive insurance industry, visit www.Vermontcaptive.com or call Dan Towle at 802-828-5232 or email firstname.lastname@example.org .
Source: Department of Economic Development
Last Updated at: January 26, 2015 08:38:08