Vermont Captive Insurance Company Formations Start Strong
First Quarter Pace Surpasses Vermont’s 30 Year Average
Montpelier, VT, April 21, 2011 - Vermont licensed 7 new captives in the first quarter of 2011 which is the strongest start since 2005, according to the Department of Banking, Insurance, Securities and Health Care Administration (BISHCA). The 7 new captives consisted of 4 single-parent, 2 risk retention groups and a special purpose captive.
“We’re seeing wide diversity in the types of applications,” said David Provost, Deputy Commissioner of Vermont’s Captive Insurance Division. “Captives formed for professional medical liability and smaller to mid-sized companies are trending strongly.” The first quarter pace surpasses Vermont’s 30-year first quarter average of 5.2 captives.
“It is encouraging to see this strong start to 2011,” said Governor Peter Shumlin. “We will continue to work with the legislature to be responsive to industry needs. Vermont is committed to maintaining its ‘Gold Standard’ reputation.”
Vermont has current captive insurance legislation, H.438, which has passed the House of Representatives and has moved on to the Senate. The proposed legislation will allow for the formation of incorporated protected cell companies and expand its cell legislation, providing more options for companies interested in that structure.
“Vermont continues to see an increasing number of smaller and mid-sized companies exploring the captive insurance option,” said Dan Towle, Director of Financial Services. “This trend exemplifies how Vermont provides a good fit for companies of all sizes.” Half of Vermont’s captives write less than $5 million in gross written premium annually.
Vermont is the largest captive insurance domicile in the U.S. and the third largest in the world, with an excess of $25 billion in gross written premium in 2010. Vermont is also home to 42 of the companies that make up the Fortune 100, and 18 of the companies that make up the Dow 30 have Vermont captives.
Captive insurance is a regulated form of self insurance that has existed 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 securitization, 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 industry, please visit www.VermontCaptive.com, call Dan Towle at 802-828-5232 or email at firstname.lastname@example.org.