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Mancini's Musings on VCIA 2011: Facts, Figures and Frivolity by Chris Mancini, Partner and CEO Nature's frog-strangling deluge on Day One of VCIA 2011 failed to dampen the enthusiasm of over 1,000 pre-registered attendees, with 100+ more registering at the door. Following the opening reception held in the packed exhibit areas of the Sheraton, the assembled masses swam -- I mean swarmed -- down the hill into downtown Burlington for the numerous receptions and dinners that Day One serves up. This year's conference attracted 100 first-time attendees, with 80 of them attending the "first-timers" session this year! Conference delegates hailed from 41 states and 6 countries, with captive owners making up 25% of the total attendees. VCIA reports that the Captive 101 pre-conference seminar was packed, with the governance track also attracting impressive numbers. Vermont continues to impress with its ongoing success as the top US domicile. David Provost and Sandy Bigglestone shared a few up-to-the-minute stats with us: So far this year, VT has licensed 22 new captives. Numbers 23 and 24 are in the imminent pipeline, with many more still in the hopper. We would point out that as of July 31st, 2010, Vermont had licensed 20 new captives. Despite international economic turmoi. and soft market conditions, captive formations have continued undeterred, with Vermont continuing to dominate US domiciles. [Follow this link to see how VT and other domiciles finished 2010.] We'll see how 2011 goes, but we are decidedly optimistic, with most domiciles showing strong results so far this year. Already, VT has licensed a couple of SPFC's. Hot industries include retail, med mal, religious, professional services, and education. Of the 22 new captives, 13 are pure captives, with a few redomestications from other domiciles -- both US and non-US. When asked about the increase in medical/hospital captives, David Provost explained, "More doctors are being pushed into hospital groups, resulting in hospitals forming RRGs. The risk retention group structure allows hospitals to avoid the costs of fronting that they would incur if they organized as a captive." Provost continued, "Vermont is the largest domicile for RRG's, boasting 85 out of 253 in the US, amounting to a third of all RRGs in the US." Sandy Bigglestone agreed wholeheartedly, adding, "RRGs in Vermont are indeed strong -- even an uptick from last year's numbers." Vermont continues to impress. Returning to the issue of redomestications, Provost shared that Vermont typically sees 5 or 6 redomestications annually. This year, he reports receiving an "unprecedented number of inquires." We are anxious to see where this leads year-end captive formation numbers across both US and non-US domiciles. With new captive formations going strong, we asked how Vermont was doing relative to captive closures. Provost replied, "Closures have slowed down a lot. The clean-out we have seen for the last couple of years seems to be done." We believe it is possible that this trend could well change somewhat, should increased mergers and acquisitions result in more captive closures. Time will tell. We at captive.com are delighted to see Vermont continuing to build on 30 years of captive growth. The expertise, efficiency, stability, friendliness, and accessibility of the regulatory staff combine with the one of the strongest associations in the industry to attract an impressive share of captives to the state. I see no signs of Vermont sitting on its laurels. Neither the Insurance Department nor VCIA are by any stretch of the imagination basking in their historical success. Vermont continues to innovate, enjoying strong support from Governor Peter Shumlin and the legislature in the state. As for VCIA, who could ask for anything more? Vermont will continue to do very well indeed.
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