Utah gained 54 new captive insurance companies during 2010, according to the Utah Insurance Department. At the end of the year, there were 188 captive insurers in active operation with another 11 new applications pending. The state added 33 new captives in 2009, and 32 in 2008.
According to the Captive Division’s Director Ross Elliott, the growth occurred principally in pure (single-parent company) captive structures from domestic U.S. parent organizations. Four companies re-domiciled from offshore locations, while the others were all new formations. Industry growth was higher in the healthcare, manufacturing, and professional services sectors.
Insurance Commissioner Neal Gooch commented that, in addition to Utah’s favorable insurance regulations, the business-friendly environment, easy-to-reach transportation structure, and fantastic tourism venues also contributed to the captive growth rate. He cited Forbes’ 2010 recognition of Utah as the No. 1 location for business and careers, as well as Pew Research’s ranking of Utah as the best governed state, to back his point.
Captive insurance companies (captives) are insurance companies formed and wholly owned by the businesses, associations, and groups that they insure. Captives are formed as risk management tools and as alternatives to the traditional insurance market. Captive insurers domiciled in Utah provide insurance to contractors, nursing homes, energy companies, manufacturers, and others. The Legislature passed the captive act in 2003 to take advantage of the economic benefits that can be derived from captive regulation.
Source: DOI
Topics Carriers
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