Vermont continued to dominate as US domicile of choice in 2021
Vermont licensed 45 new captive insurance companies in 2021, making it among the fastest-growing years in its four decades as a domicile. The state is now home to 620 licensed captives, 589 of them active.
Among the licensed captive companies, Vermont’s 52 sponsored cell captives currently also host nearly 500 cells and separate accounts. Nine of the new captives formed this year were sponsored cell companies.
The 45 new licenses is the fourth-highest total the state has recorded. The new captives were licensed in 17 different industries, with healthcare, real estate, manufacturing, insurance, and transportation leading the way. At least five of the new captives were formed by companies with international roots, from Japan, Germany, Russia, the UK and Australia.
“Vermont continues to be a global leader in the captive industry and has proven, once again, to deliver high-quality regulatory oversight and partnership that also meets the unique needs of captive businesses,” said Vermont Governor Phil Scott.
The state also saw fewer captives dissolved in 2021 than typically, according to Brittany Nevins, the state’s captive insurance economic development director. Only 14 captives were removed, due to mergers, acquisitions or other business reasons.
“This speaks to the strength of captive insurance as a long-term risk management tool and is something we expect to continue to see with the continuation of the hard insurance market,” said Nevins.
According to David Provost, deputy commissioner of captive insurance, the rise in captive cells companies was also striking.
“Vermont continues to see the growth in sponsored cell captives following consistent legislative updates over the recent years,” he said. “Many companies are realising the opportunity and flexibility the cell structure provides for their company.”
2021 marked Vermont’s fourth decade as a captive domicile. The state has licensed 1,242 captive insurance companies since 1981 and remains easily the largest US domicile for captive insurance and the third-largest globally. It also hosts a significant captive infrastructure with at least 22 captive management firms, as well as other service providers.
“It’s been an incredible year of celebrating Vermont’s rich 40-year history,” said Rich Smith, President of the Vermont Captive Insurance Association (VCIA). “The growth this year speaks to the expertise of Vermont’s regulators and industry service providers, the consistency of support for captives in the legislature, and the ability of all involved to adapt to the fast-changing needs of the industry during these volatile times.”