Arizona marks 25 years as captive insurance powerhouse

As the state prepares to celebrate a quarter century of being a captive domicile, chief analyst Victoria Fimea outlines how steady growth, infrastructure investment and regulatory reforms are propelling Arizona up the global rankings.

Arizona is preparing to mark a milestone year for its captive insurance sector, one that regulators believe underscores both longevity and momentum. In 2026, the state will celebrate the 25th anniversary of its captive insurance statute, a silver anniversary that officials are keen to use as proof that Arizona is no longer an emerging domicile, but a mature and increasingly influential player on the global captive stage.

The state will also have a stall at this year’s Captive Insurance Companies Association (CICA) annual conference in Palm Springs. Staff will exhibiting at CICA at booth number 416.

For Victoria Fimea, chief captive analyst at the Arizona Department of Insurance and Financial Institutions, the anniversary is more than a ceremonial date in the calendar. It is an opportunity to remind risk managers, brokers and captive owners that the state’s growth has been measured, deliberate and sustained.

“This is an area where you do not want to be the best kept secret,” she says. “We would like to promote the fact that we’ve been around for a quarter century. We’re not one of the newcomers. Arizona has had consistent growth throughout its history, and that measured growth is a sign of consistency in the domicile over a very long period of time.”

That consistency has translated into rising global prominence. According to figures cited by Fimea, Arizona ended 2024 ranked tenth in the world by number of captives, up from twelfth previously, while holding on to seventh place in the US. Those rankings matter in a competitive international marketplace, particularly when set against the sheer scale of the American captive sector as a whole.

“The United States is the largest captive domicile on the planet,” she notes. “Recent statistics I’ve seen state that just over 55% of all captives are domiciled somewhere in the United States. That’s an important statement not only for US regulators as a whole, but the fact that Arizona keeps climbing that ladder.”

Premium volume is another indicator of the state’s upward trajectory. “As of the last batch of statistics, year 2024, we were at that $13bn number, which is large, it’s pretty impressive, and that continues to grow,” Fimea says.

Taken together, the rankings, premium figures and longevity underpin a marketing message that has begun to circulate in the state: a quarter century of trust. The phrase is designed to reassure captive owners that Arizona offers stability in an environment where regulatory certainty and institutional memory are prized.

That sense of permanence is reinforced by the physical presence of the captive industry itself. Fimea points to the fact that major captive managers and brokers have invested in bricks-and-mortar operations across the state, rather than operating at arm’s length.

“They’ve made an investment in Arizona, and had made that investment quite a while ago,” she explains. “All the major brokerages are here, and all of those commercial brokerages have a subsidiary that handles captives. We have large, independent captive managers that are here. We've got the banking industry to serve them, the auditors, actuaries, law firms. So it’s all an infrastructure that’s been developed over the last quarter century.”

The wider economic evolution of Phoenix and the state have helped nurture that ecosystem. Over several decades, public policy makers set out to transform the city into a major commercial hub, investing heavily in transport and infrastructure.

“They invested in the expansion of [Phoenix] Sky Harbor International Airport. They invested in the roads and infrastructure, light rail,” Fimea says. “So now we have all of these non-stop flights around the world.”

More recently, federal investment in semiconductor manufacturing has placed Arizona close to what she describes as one of the largest chip manufacturers in the US, helping to drive international links such as direct flights to Taiwan. The ripple effects of such corporate expansion are significant for the captive sector.

“When you have that sort of corporate growth, the suppliers grow with those corporate entities, and that whole ecosystem then creates the type of environment where the risk managers for those companies begin to think about, are we getting the best positioning and pricing that we can from the commercial market? Should we look at some alternative risk management like a captive?” she says. “That spins out organically locally here in the state, but also brings the interest in captives outside of Arizona to Arizona.”

The state’s economy itself has diversified dramatically over the past quarter century. Once known primarily for tourism, real estate and the so-called “five C’s” – copper, cotton, cattle, climate and citrus – Arizona has broadened its industrial base, with high-tech manufacturing returning mining to prominence and drawing in a new generation of corporate groups.

“Over the last 25 or 30 years, it’s really grown, and so consequently, the growth of this department of insurance, with captive insurers, has grown accordingly,” Fimea says.

Regulatory responsiveness has been another pillar of Arizona’s strategy. The state periodically revises its captive statute to reflect changing market conditions, and one of the most significant recent updates came with House Bill (HB) 2193 in 2025. The legislation introduced a series of technical but important reforms, ranging from dormancy provisions to capital requirements and funding mechanisms for the captive division itself.

Fimea, who joined the department in May 2023 after a career in the private sector and service on several state captive association boards, says the changes were driven by close engagement with industry participants.

“Speaking with the association members and their board, and also receiving feedback as we attend captive conferences, or captive owners or captive managers speaking with us, you begin to think, they’re giving us some good ideas here,” she says. “The ideas would not in any way result in captives not being able to function well and remain solvent.”

One of the most welcomed reforms was the introduction of dormancy. Previously unavailable in Arizona, dormancy allows a captive to scale back operations temporarily, retaining only minimum capital and filing streamlined reports, rather than being forced into full closure if market conditions shift.

“These captive owners spend a lot of time, a lot of money to form their captive,” Fimea says. “Markets change, their businesses change – that’s the whole idea of captives, flexibility. I like to say it just goes to sleep. And then when market conditions change, they can resurrect that captive.”

Early uptake suggests pent-up demand. “Right out of the gate we had a couple captives request dormancy, so that shows the flexibility it provides to businesses,” she adds.

HB 2193 also reduced the minimum statutory capital for protected cell captive insurers. Because the licensed core of such structures typically does not bear risk – with exposures sitting in the individual cells – Fimea says it made sense to lower the capital threshold to $250,000.

“It made sense not to have businesses really trap that much capital in the core and not be able to deploy it for something else,” she says.

Other amendments were more technical but equally important for day-to-day operations. Language in the statute was updated to recognise that captives organised as limited liability companies are overseen by managers rather than directors, ensuring regulatory requirements align with corporate structures.

Perhaps the most strategically significant change, however, concerned how the captive division itself is funded. The unit operates entirely from licensing and renewal fees paid by captives, but under the previous timing rules much of that revenue risked flowing back into the state’s general fund because of mismatched fiscal years.

By shifting the renewal payment window to the start of the state fiscal year, Arizona ensured the captive division can retain and deploy its full budget.

“It simply frees it up for us to be able to deploy all of that money in the way that supports captives for Arizona,” Fimea says, adding that the reform will help sustain the “collaborative and productive working relationship” between regulators and the Arizona Captive Insurance Association.

That partnership will be on display later this year at the association’s annual symposium in Scottsdale, scheduled for 22 October, which will double as part of the state’s 25th anniversary celebrations.

For Arizona, the message to the captive market is clear: longevity has bred confidence, infrastructure and expertise, while legislative fine-tuning continues to keep the domicile competitive. As Fimea puts it, the silver anniversary is not just about looking back, but about reinforcing a reputation built on steady growth and a quarter century of trust.

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