Vermonters from the governor on down are not shy about expressing their affection for the state’s captive insurance industry.
At the recent 19th annual conference of the Vermont Captive Insurance Association (VCIA) in Burlington, state officials told the audience of 1,200 captive insurance leaders that as much as Vermont has already done for them in terms of easing regulations and reducing tax burdens, it is prepared to do even more to keep them happy and coming back to the Green Mountain state.
“You are an important part of our community and economy,” Gov. Jim Douglas told the 1,200 in his captive audience, adding, “We are not going to take you for granted.”
The state appreciates the more than 1,000 high-paying (average salary: $52,000) jobs the industry has spawned, as well as the $20 million in tax revenues—an amount about equal to the state’s entire general fund surplus, noted Douglas.
Captive insurance allows corporations to establish their own insurance company. Captive insurance accounts for about 15 percent of the U.S. commercial insurance market and has grown by about 50 percent in 12 years.
In the past year, Vermont, already the leading domestic destination for captives with more than 685 licensees, has streamlined its regulations, upgraded its captive regulatory division, put a cap on the taxes captives pay and allowed captives to become limited liability companies.
If that is not enough to keep captives coming back and the numbers growing, John Crowley, Commissioner of Banking, Insurance, Securities and Health Care, told the industry to just let him know what else Vermont could do.
“If you ever come across a regulation you think is unreasonable, let me know and I am sure we can work out a resolution to our mutual satisfaction,” Crowley told the attendees.
The friendly approach appeared to pay immediate dividends. The smiling governor announced that Ace USA would be opening a Burlington office for captive operations.
Vermont captive enthusiasts also revealed they had another trick up their sleeve.
The VCIA, working along with the University of Vermont, is launching the International Center for Captive Insurance Education. The ICCIE will offer a curriculum culminating in an Associate in Captive Insurance (ACI). It’s the first of its kind in the nation.
Courses will be offered each August before the Vermont association’s annual conference, online and at professional meetings around the country.
“Because the captive industry has grown so quickly, companies have had difficulty finding qualified staff and have had to take on training responsibilities themselves,” said Molly Lambert, president and chief executive officer of the VCIA. “A formal training program was clearly needed.”
UVM President Daniel Fogel said the industry’s presence in Vermont made a training program a natural fit for the university.
“This is exactly the kind of role UVM should be playing in the state – promoting economic development efforts that result in high-paying jobs that have low environmental impact,” Fogel said.
For a complete report from the Vermont Captive Insurance Association annual conference, see the Aug. 23 edition of Insurance Journal East.
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