Vermont licensed 33 new captive insurance companies in 2015, according to data released by the Vermont Department of Financial Regulation.
2015’s new licensees bring Vermont’s overall total licenses to 1,062 with 588 active captive insurers.
Vermont officials said an active pipeline of prospective captives is already underway for 2016, with one new license already recorded in 2016 and three more applications currently in process.
The new captives in 2015 were made up of 12 pure captives, seven risk retention groups (RRGs), seven sponsored captives, four special purpose financial insurers, two industrial insured captives, and one association captive.
There were 11 “redomestications,” which is when an existing captive moves from another domicile to Vermont. That is the largest number ever to occur in a single year in Vermont. There were three redomestications each from South Carolina and Arizona, two from Bermuda, and one each from Cayman Islands, Nevada and Kentucky. Six of the 11 redomestications to Vermont were by risk retention groups.
Vermont Gov. Peter Shumlin said 2015 was “another great year” for captive insurance in his state. “The record number of captives redomesticating to Vermont reinforces our ‘Gold Standard’ reputation,” he said.
Vermont officials said growth in 2015 was up significantly from 2014 when 16 companies were licensed. Officials also said growth is impressive especially when considering the prolonged soft market and added competition by other U.S. states.
Dan Towle, Vermont’s Director of Financial Services, said it’s encouraging that a record number of captives have redomesticated to Vermont last year.
“Companies that have an established captive insurance company and have operated them for a number of years are often among the most knowledgeable and sophisticated when it comes to doing proper due-diligence on domicile selection,” Towle said.
Dave Provost, Vermont’s Deputy Commissioner of Captive Insurance, added that the quality of Vermont’s 2015 licensees continues to be outstanding.
“Vermont’s focus will always be licensing quality companies and regulating them in an appropriate manner commensurate with their risk,” Provost said.
New captives were licensed in industries including insurance, healthcare, construction, real estate, professional services, education, transportation, agriculture and retail.
Officials said the strong diversity of licenses were highlighted with seven in the healthcare sector.
“The continued formation of hospitals and doctors’ groups setting up captives in Vermont has been a very positive trend that we expect to continue,” said Towle. “Hospitals maintain a high interest in forming their captive on-shore and in Vermont.”
The newly licensed captives in healthcare include Emergency Medicine Specialist; SIHO Holdings; Physician Insurance, a Mutual Company; Shields Health Care Group; Multi-County Physicians Insurance Association; Long-Term Care Facilities; and Doctors and Surgeons National Corporation.
Other notable captives in the class of 2015 include PricewaterhouseCoopers LLP; Syracuse University; Cummins; Marubeni Corporation; Willis Management (Vermont) Ltd.; National Life Insurance Company; Wilbur-Ellis Company; Zurich Insurance Group; and 17 Universities and colleges.
Captive insurance has been a part of the Vermont insurance industry since 1981, when Vermont passed the Special Insurer Act. Vermont is the largest captive insurance domicile in the U.S. and the third-largest in the world.