MONTPELIER, Vt. (PRWEB) January 08, 2019
The State of Vermont licensed 25 new captive insurance companies in 2018, according to data released by the Department of Financial Regulation. The new licenses were made up of 12 pure captives, 4 risk retention groups (RRGs), 3 sponsored captives, 2 industrial insured captives, 2 special purpose financial insurers, 1 branch captive and 1 affiliated reinsurance company (ARC). The newly formed ARC is the first of its kind and comes less than a year after Vermont passed legislation establishing this new type of captive structure.
“I am extremely proud of the outstanding performance of our captive team and the leadership that Vermont continues to deliver for this industry,” said Governor Phil Scott. “2018 proved to be another great year for captive insurance in Vermont.”
The new captives were licensed in healthcare, insurance, retail, manufacturing, professional services, real estate, entertainment and energy. Vermont continues to see strong growth from the healthcare industry, with 6 new healthcare captives licensed in 2018—including American Academic Health System LLC, Vertex Pharmaceuticals Inc., Non-Acuity Physicians & Physician Groups, Long-Term Care Facilities, The Crestwood Group and CARE Professional Liability Association, LLC.
“The continued growth of hospitals and doctors’ groups forming Vermont captives for medical professional liability coverage has been very positive,” said Ian Davis, Director of Financial Services. “We are also seeing a considerable amount of interest from mid-market companies, and expect both trends to continue in 2019.
Other notable captives in the class of 2018 include Twenty-First Century Fox, Inc., ACE Hardware Corporation and MAPFRE Re. MAPFRE Re becomes the first ARC to form in Vermont and establishes the state as a viable, domestic alternative for U.S. companies that are currently reinsuring offshore and may now be subject to the Base Erosion and Anti-Abuse Tax (BEAT) included in the Tax Cuts and Jobs Act of 2017.
“We pride ourselves on keeping pace with the needs of the industry,” said Dave Provost, Deputy Commissioner of Captive Insurance. “The regulatory enhancements we were able to introduce last year highlight our state’s ability to adapt quickly in support of the captive insurance industry.”
The new captives licensed in 2018 bring Vermont’s overall total licenses to 1,137, with 558 active captive insurance companies. Vermont – the largest U.S. domicile and third largest in the world – has an active pipeline of prospective new captives and expects continued, consistent growth for the coming year.
Captive insurance is a regulated form of self-insurance that has existed since the 1960’s and has been a part of the Vermont insurance industry since 1981, when Vermont passed the Special Insurer Act. Captive insurance companies are formed by companies or groups of companies as a form of alternative insurance to better manage their own risk. Captives are commonly used for corporate lines of insurance such as property, general liability, products liability, or professional liability.
For more information on Vermont’s captive insurance industry, visit http://www.vermontcaptive.com, call Ian Davis at 802-828-5232 or email ian.davis(at)vermont.gov.
The Department of Economic Development operates within the Agency of Commerce and Community Development, whose mission is to help Vermonters improve their quality of life and build strong communities.