Regulation and Oversight
A recent report, titled "Driving Captive Transformation in Asia," reveals that 50 percent of all new captive incorporations in Asia are from Labuan International Business and Financial Center (Labuan IBFC).
For decades, captive insurance companies have fought legal battles over tax issues with federal regulators and, more recently, state regulators, and there is no sign those battles are easing.
Another major organization, the University of Vermont (UVM) Health Network in Burlington, has redomiciled its medical malpractice captive insurer, VMC Indemnity Company, Ltd., from Bermuda to Vermont. The relocation of the captive, which was first licensed in Bermuda in 1993, was applauded by Vermont Governor Phil Scott.
There are currently 43 captive insurance companies licensed in Texas, and the domicile expects to have at least 44 captives in the state by the end of 2019. Texas regulators say the department successfully manages the volume of captive formation inquiries and maintains an open door policy.
A date has been set for the next hearing on the challenge by Alaska Air Group, Inc., of the Washington State Insurance Department's attempt to impose hefty financial fines on the airline for not paying premium taxes on coverage its captive insurer provides to Alaska Air subsidiaries operating in Washington.