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Corporate Regulation and Governance in Captives

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Delve into captive insurance governance matters including board attributes, board structure, and board accountability. With 30 years of insurance experience from the auditing, regulatory, and management side, Derick White, managing director of corporate governance and regulation for Strategic Risk Solutions, offers key insights into captive board governance.

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Maglaras & Company Advises Vermont's 1,100th Licensed Captive Insurer

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September 19, 2017

Vermont recently licensed its 1,100th captive insurance company, AssureCap Indemnity, LLC. The sponsored captive insurance company was formed by the Assurance Agency, Ltd., a large independent insurance brokerage headquartered in Schaumburg, Illinois.

Michael Maglaras, principal of Michael Maglaras & Company, advised Assurance on AssureCap's formation and business plan. Mr. Maglaras said, "I like to match the energy of my clients with the energy of the domicile ... Assurance Agency and the State of Vermont both maintain a strong commitment to responsiveness and service excellence. For me, as a consultant, Vermont was the natural domicile for this transaction." Michael Maglaras & Company logo

David Provost, deputy commissioner of captive insurance at Vermont's Department of Financial Regulation, commented, “We have built an industry based on licensing top-quality companies for risk management and risk financing, regulating them in an appropriate manner, and providing excellent service. This foundation will serve us well as we look forward to licensing the next 1,100 captives."

Vermont is the largest captive insurance domicile in the United States and the third largest in the world. There are more than 30 states with captive insurance authorizing laws. Vermont's captive insurance companies had over $200 billion in assets under management in 2016, the most of any domicile in the world. Vermont is also home to captives for 43 Fortune 100 companies and 15 Dow 30 firms.

For additional clarity on sponsored captives, an excerpt from Section IV of Risk Financing on the topic of protected cell companies (PCCs) is provided below.

Protected Cell Companies

In different domiciles, slightly different terminology is used. Bermuda uses the term "segregated account companies," and Cayman calls them "segregated portfolio companies." Some domiciles without specific PCC legislation allow similar structures referred to as "sponsored" captives. They each provide the same core benefit—separation of accounts within a single captive insurance company for protection from other captive participants' creditors. 

If you subscribe to Risk Financing on IRMI Online or ReferenceConnect, you can read more about PCCs and other complex topics. If you don't subscribe, learn more here.

For more on Vermont captives, read the Captive.com articles "Vermont Agency Captive Insurance Law Details Revealed" and "Vermont Provides Most Current Captive Insurance Figures at VCIA Conference."

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