The University of Vermont (UVM) Health Network has said that it will be moving its captive insurance company to Vermont from Bermuda.
This was unanimously decided by the board of directors of VMC Indemnity Company (VMCIC), the health network subsidiary that provides medical malpractice insurance coverage for its medical providers.
The change in location will not affect providers insured by the plan or the cost of health care in Vermont. The cost of making the conversion is expected to be approximately $35,000-$50,000, and Vermont will collect approximately $50,000 annually in premium taxes.
In a statement, UVM Health Network cited Vermont as a leading location for captives, offering a predictable and stable regulatory environment, and a standard self-insurance practice option for academic medical centres that can make malpractice insurance less expensive than what is available through commercial insurance companies.
John Brumsted, president and CEO of the UVM Health Network and VMCIC board member, said an analysis was carried out comparing the two domiciles, and suggested that they can continue to provide low-cost, predictable insurance coverage to its providers if the captive is located in Vermont.
“We strongly believe in doing business locally whenever possible, so we’re happy that being in Vermont is the best business decision in this case," said Brumsted.
Since 1983, 36 captives have moved from offshore domiciles (28 from Bermuda, seven from Cayman and one from Barbados) to Vermont.
Vermont Governor Phil Scott commented: “Our captive insurance industry is a shining example of what can be accomplished when we work together to provide and grow good jobs here in Vermont. We’re pleased the UVM Health Network is moving their captive insurance plan home to Vermont, and hope this sends the message loud and clear to more organizations that this is a great place to do business, and the best place to domicile captives.”
The decision was also welcomed by David Provost, Deputy Commissioner of the Vermont Department of Financial Regulation.
Provost noted that there has been a flow of companies from offshore domiciles to onshore domiciles, which happen for a number of reasons.
"For one thing, 20-30 years ago there were only a small handful of upstart states with captive laws, while Bermuda and Cayman were well-established domiciles," he said. "Now there are many onshore options, including states like Vermont or South Carolina with long histories of running a good captive domicile, and plenty of newer or home-state domiciles. There are fewer and fewer reasons to push a company offshore, and plenty of good reasons to stay onshore, including simple perception issues. I expect the trend will continue at a moderate pace."
UVM Health Network, Healthcare, Captives, Bermuda, Vermont