Vermont: 2022 was banner year for captives
The Vermont Captive Insurance Association has hosted “Captive Insurance Day” at the Statehouse at the state capital Montpelier to highlight the continued success of the captive insurance industry in the state after what it said was another banner year in 2022.
The state of Vermont licensed 41 new captive insurance companies in 2022, bringing Vermont’s total number to 639 licensed captives, consisting of 608 active and 31 dormant captives.
Vermont’s 59 sponsored cell captives currently host over 500 cells and separate accounts, in addition to the licensed captive companies. The growth in captive formations in 2022 is Vermont’s 6th highest year of growth in its over 40-year history since passing captive-enabling legislation in 1981.
“Vermont has so much to offer, and the captive insurance industry remains a point of pride in our state,” said Governor Phil Scott. “We look forward to once again improving our statutes this legislative session so we can continue to be a leading choice for companies in their captive insurance domicile selection.”
“While we are happy to have another year of record growth, we never stop asking ourselves how we can be better,” said Sandy Bigglestone, Deputy Commissioner of Captive Insurance at the Department of Financial Regulation (DFR). “We are actively looking into how to improve our statutes and internal processes to be most efficient and useful for businesses and look forward to providing the best service to them in the year ahead.”
The new captives were licensed in 17 different industries, the top three industries being healthcare (7 captives), construction (five captives), and real estate (four captives). At least four of Vermont’s new captives in 2022 were formed by companies with international roots, —including Canada (two companies), Mexico and Austria. Top formation types were pure (30), Sponsored (six), Agency (two) and Risk Retention Groups (two). Nearly 40 new cells were formed in 2022.
“Throughout the pandemic captive insurance has been a great tool for the health care industry,” said Christine Brown, Director of Captive Insurance, DFR. “Hospitals and health care providers have had emerging risks and fewer available insurance options. Captive insurance has given them a way to have more control over that risk that’s also financially sustainable.”
The State of Vermont returned to pre-pandemic outreach with businesses in 2022 and the Vermont Captive Insurance Association (VCIA) held it’s first in-person annual conference in Burlington since 2019. Attendance at the conference reached nearly 1,000 and 71 companies exhibited at the conference. Five countries were represented at the conference.
“The captive industry has remained steady throughout the pandemic, and is thriving here in Vermont,” said president of the VCIA, Kevin Mead. “The momentum is strong to keep developing this great industry. We continue to raise awareness about captive insurance around the world, and we look forward to expanding our efforts in the year ahead.”
Vermont has licensed 5 new captives already in 2023 and has a total of 1288 captive insurance companies to date. Vermont remains, by far, the largest US domicile for captive insurance and third largest in the world. With an active pipeline of prospective new captive insurance companies already underway, the state expects continued growth in the coming year.
“The captive industry brings in significant and increasing revenue to the state of Vermont and jobs for Vermonters year after year,” said Brittany Nevins, Captive Insurance Economic Development Director, Department of Economic Development. “We are committed in 2023 to continuing our proactive and innovative work to remain a top domicile choice for captive insurance companies worldwide.”
Vermont received multiple awards in 2022. Vermont was named “Domicile of the Year - Highly Commended” by Captive International.
“Despite times of great transition in the world, the Captive Insurance Division in Vermont has continued to be a leader that companies can count on,” said Department of Financial Regulation Commissioner Kevin Gaffney. “Our dedication to quality and efficient regulation of captive insurance companies has been unwavering through periods of change.”