Sweet Success

Only a few months ago, insurance captives were a topic of some criticism in the presidential primaries. But after Vermont Governor Dean was eliminated, candidates stopped talking about them and, come to think of it, about Dean.

While the campaign trail may be silent on the issue, there is still talk about captives in Vermont, only here the talk is as thick and as sweet as, well, maple syrup. Politicians and regulators openly sing the praises of captives. They are in love with the $20 million the industry generates for state coffers and the high-paying (and, as Gov. Jim Douglas noted, “non-polluting”) jobs the captives bring to the state.

At this month’s annual conference of the Vermont Captive Insurance Association (VCIA) held in beautiful Burlington, Vt., an estimated 1,200 people showed, maybe not a big crowd for New York or even Baltimore, but certainly big by Vermont standards. It was also a big crowd by the standards of the captive insurance industry. VCIA President Molly Lambert proudly proclaimed it was the largest gathering of captive insurance experts in the world. Not to be outdone, Gov. Douglas pegged it as the largest such assembly in the universe.

The state was the first to encourage the formation of captives and has never waffled in its commitment to remain the domestic leader. In the past year alone, it has enhanced its environment by upgrading the captive department within the insurance department; promoting its respected captive regulator, Len Crouse, to first deputy commissioner; simplifying its regulations; reducing premium taxes; establishing a premium cap, and adding new staff. As a result, the Green Mountain state is closing in on its 700th licensee.

Vermont’s success has not been lost on other states. Among the more than 100 exhibitors stacked like pancakes in the VCIA hall were the District of Columbia, New York, Montana and South Carolina. Bermuda, the British Virgin Islands and Gibraltar also had booth reps in search of prospects. Will the growth in the number of jurisdictions vying for captives mean heated competition among the states? Not necessarily. As a D.C. representative said, there’s plenty of business to go around without one state stealing from the plate of another.

Vermont has no intention of frittering away its lead. Now the state is demonstrating its commitment through education. The VCIA, working along with the University of Vermont, is launching the International Center for Captive Insurance Education, which will offer a curriculum culminating in an Associate in Captive Insurance (ACI). It’s an ambitious attempt to maintain high standards in this relatively young industry and a clever way to encourage captives to stick with Vermont.

However the competition among states trying to carve out a piece of the captive pie shakes out, the state’s education initiative reminds all challengers that Vermonters know how to tap more than maple trees.

Topics Training Development Vermont