Utah’s captive market powers ahead with 638 risk-bearing entities

Utah has recorded 52 new captive licences so far this year, with captive director Travis Wegkamp (pictured) expecting another strong finish — but firms face tighter enforcement of the state’s annual meeting requirements.

Utah’s captive insurance sector is on course for another strong year of growth, with licensing activity ahead of normal levels and the state continuing to position itself as a stable and innovative domicile.

Travis Wegkamp, director of captive insurance at the Utah Insurance Department, said the state had licensed 52 risk-bearing entities by the end of August, despite the traditional slowdown in the first half of the year and around the middle of the year.

Of those 52 new licences, 19 were cell captives. Meanwhile, 19 captives had closed, leaving Utah with net growth of 33 entities and a total of 638 risk-bearing entities as of 31 August.

“It’s been a very good year so far for us,” Wegkamp said.

The figures represent a strong performance for Utah, which has continued to attract captive owners and managers looking for an alternative to more traditional insurance arrangements.

Wegkamp expects that momentum to continue through the final months of 2026.

“I’m expecting overall a strong year again with some net growth,” he said. “So, [2026 is] looking to be another strong year, I think.”

Growth despite seasonal slowdown

Utah’s licensing pattern is influenced in part by the structure of its captive licensing fees.

For a pure captive, the initial licence fee is $7,500. The fee is not prorated, meaning a captive formed in January pays the same initial amount as one formed in June, before having to renew the licence for 1 July.

“For most captives, that’s not a big deal,” Wegkamp said, but the arrangement appears to influence the timing of formations. Activity tends to slow as the state approaches the middle of the year.

Despite that seasonal effect, Utah licensed around 40 captives during the first half of the year, which Wegkamp described as “above normal”.

Activity subsequently accelerated, with around 13 additional licences issued during July and August.

The result has left the state well placed for what Wegkamp describes as the “strong end-of-year season” that Utah has come to expect.

There is one area, however, where 2026 is unlikely to match the exceptional growth recorded in previous years: cell formations.

Wegkamp said the unusually high number of cells established during the past two years was partly attributable to a single captive manager transferring programmes into Utah from another domicile.

“We won’t have the total number of cell formations that we’ve had the last two years,” he said. “That was one captive manager that was transitioning their programmes here to Utah from another domicile.”

Nevertheless, he expects cell activity to remain an important contributor to Utah’s overall growth.

Cells broaden access to captives

Wegkamp attributes Utah’s continued expansion to several factors, including the growing sophistication of companies in their approach to risk management and the increasing willingness of businesses to consider captive structures.

Captive managers, he said, have also played an important role in expanding awareness of the benefits of alternative risk financing.

“The captive industry just remains popular,” Wegkamp said. “Captive managers are doing a great job of getting the word out there and finding new clients and new opportunities.”

Cell captives have been particularly significant because they allow businesses to enter the captive market without the same level of upfront commitment required to establish a standalone pure captive.

“The cell growth has contributed to that a lot, allowing companies to get in without the major upfront costs of doing a standalone pure captive,” Wegkamp said.

That has helped open the market to smaller and middle-market companies, which might otherwise find the capitalisation and infrastructure requirements of a standalone captive prohibitive.

“Doing smaller programmes overall” has made the captive option more accessible, Wegkamp said, adding that cells are “allowing middle and smaller market companies to get involved with it”.

The broader development reflects a wider shift in how businesses view risk, with companies increasingly looking for greater control over insurance costs and risk financing rather than relying exclusively on the conventional commercial market.

Utah seeks to build a stable domicile

For Utah itself, Wegkamp believes the growth is also a reflection of the state’s reputation among captive managers.

He said the Utah Insurance Department has sought to establish itself as a stable domicile while remaining open to new ideas and structures within the limits of the state’s captive insurance code.

“I like to feel that we’ve established ourselves as a strong domicile, a stable domicile, willing to take an innovative approach to things,” he said.

That approach includes listening to new proposals and considering new opportunities where the department believes they can work within Utah’s regulatory framework.

Wegkamp said he has made it his mission to provide that combination of stability and openness during his time in the role.

“I’ve been in the position for a while now, and just made it my mission to be that stable entity,” he said.

Relationships with captive managers have been particularly important, with word of mouth helping to build Utah’s profile within the industry.

“I think the word of mouth has spread a lot with the captive managers, and we’ve established that good relationship with them,” Wegkamp commented.

Reminder on annual meeting requirements

While the outlook for Utah remains positive, Wegkamp used the opportunity to issue a reminder to captive owners about an important regulatory requirement.

Following legislation passed during the last session, Utah now provides an alternative to the requirement for an annual in-person state meeting.

Under the existing rules, at least a quorum of a captive’s board must attend the meeting in Utah. For a company whose parent is wholly outside Utah, the quorum could technically consist of a single resident director. However, an additional outside individual must also come into the state to satisfy the in-state meeting requirement.

The alternative was introduced partly to provide greater flexibility in circumstances where an in-person meeting may not be practical, while maintaining an economic connection between captives and the state.

Wegkamp stressed that the requirement is now something the department intends to monitor and enforce closely.

The alternative is available to companies that join the Utah Captive Insurance Association at its Summit level. The current membership fee is $4,000.

“That $4,000 fee then gives them the opportunity to have that annual meeting waived,” Wegkamp said.

Captives must indicate on their annual Statement of Economic Benefit to the State of Utah whether they held the required meeting, were members of the association, or selected neither option.

The department has modified the filing to capture that information, meaning companies will now have to make their position clear.

“That will be enforced now,” Wegkamp said.

The consequences of failing to comply could be significant. If a company selects neither option, it can be assessed a fee, with a minimum of $5,000. Continued non-compliance could ultimately result in regulatory action, potentially including revocation of the captive’s licence.

“We want to make sure companies are aware of that and they prepare and plan accordingly,” Wegkamp said.

An economic benefit for Utah

The annual meeting requirement also plays a broader role in Utah’s captive model.

Rather than relying on premium taxes, Utah charges captives a flat licence fee. The in-state meeting requirement is therefore one mechanism through which the state can demonstrate that captives generate economic benefits beyond the direct fees they pay to the regulator.

The economic activity associated with captive owners, managers and related professionals can then be reflected in the state’s annual reporting.

“That’s one of the key factors as to why we have just the flat licence fee renewal as opposed to the state premium taxes,” Wegkamp said.

The Statement of Economic Benefit allows the department to demonstrate to the governor’s office and legislature that the captive sector is contributing to the wider Utah economy.

“We’re able then to show the governor’s office and the legislative body that even without the premium taxes, captives are being benefited,” Wegkamp said. “The captive economy is benefiting the state, and we have those numbers there to prove that.”

For Wegkamp, the association alternative is therefore preferable to simply imposing a financial penalty on companies that miss the meeting requirement.

He noted that there is some flexibility for companies that move into the following year. The Utah Captive Insurance Association will, for a limited period in 2027, accept membership payments that can be applied to the 2026 requirement.

Wegkamp said he would rather see the money directed towards the industry than collected as a regulatory fee.

“I’d much rather the money go to the association and be spent directly towards captive opportunities and advancement as opposed to going to our state coffers through a fee,” he said.

Stability ahead

Beyond the meeting requirement, captive owners should not expect major regulatory changes in Utah in the immediate future.

Wegkamp said the department does not anticipate significant legislative changes to the captive insurance code. The commissioner and department would prefer, where possible, not to introduce a bill during the coming legislative cycle, and if legislation is required, the intention is to keep it limited.

The changes under consideration are essentially language clarifications rather than substantive amendments to the captive regime.

“There’s no big changes on the horizon legislatively for the captive code,” Wegkamp said.

For captive owners and managers, that offers a degree of continuity at a time when regulatory certainty remains an important consideration when selecting a domicile.

Utah’s immediate priorities, therefore, appear to be less about changing its captive framework and more about consolidating the growth already achieved.

With 638 risk-bearing entities on its books at the end of August and a further licensing push expected during the final months of the year, the state is positioning itself for another year of net expansion.

At the same time, Wegkamp’s reminder over the annual meeting requirement demonstrates that Utah’s approach to growth is accompanied by an expectation that existing captives will remain engaged with the domicile and comply with its rules.

For a state seeking to balance innovation with regulatory stability, that combination may prove increasingly important as competition between captive domiciles continues.

As Wegkamp put it, Utah wants to be seen as “a strong domicile, a stable domicile”, while remaining prepared to listen to new ideas.

For now, the numbers suggest that approach is continuing to attract business.

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