20 years of captives in the state
2023 brought another 20th birthday for captives: Utah celebrated further growth in its captive insurance sector, says Travis Wegkamp of the Utah Insurance Department.
"Utah remains one of the most vibrant and healthy economies in the US." Travis Wegkamp
In 2023 Utah celebrated the 20th anniversary of the passage of its Captive Insurance Companies Act. Since 2003, Utah has seen significant growth in its local captive insurance industry and has risen to become the second largest domicile in the nation in terms of captive risk-bearing entities.
Utah is home to many local businesses and professionals who serve its captive insurance industry and contribute to the local economy. As reported by our captives, an amount in excess of $21 million is directly pumped into the economy by these companies annually. Additionally, captives account for nearly half a billion dollars of cash and invested assets held in Utah financial institutions. In 2021 Utah captives broke the $2 billion mark for gross premiums written, and that number has climbed steadily since.
Utah as a captive insurance domicile has been phenomenally successful in its first 20 years of existence. For 2023 there was another year of growth in our captives—we had 56 new formations with net growth of 27 new captives. At year-end 2023 Utah had a total of 439 risk-bearing entities.
Since inception Utah has licensed a total of 964 standalone captives and fully expects to reach the 1,000 licences milestone by the end of 2024.
Staying on top
As a captive insurance domicile Utah continues to make improvements and updates to our statutes to keep us competitive with other jurisdictions. Utah remains one of the few domiciles with zero premium taxes—captives pay only a nominal annual licence renewal fee of $7,500.
The decision has been made to allow cannabis-related captives, operating in the medical use space, to form in the state. Additionally, amendments have been proposed for the current legislative session to allow association-type captives to provide homeowners’ coverage to their members, to remove the required five-year examination period, and to reduce the minimum capitalisation requirement for sponsored captive programmes from the current $500,000 and $200,000 minimums to $250,000 and $50,000, respectively.
Utah remains one of the most vibrant and healthy economies in the US and the world, and is often ranked year over year as one of the best states to do business. Come and see what makes Utah the place to be!
To find out more visit insurance.utah.gov/captive
Travis Wegkamp is the director of captive insurance at the Utah Insurance Department. He can be contacted at: twegkamp@utah.gov
