Vermont Named World's Number 1 Captive Insurance Domicile
August 08, 2023
The Vermont Department of Economic Development recently announced that Vermont has been named the top captive insurance domicile in the world.
According to a press release from the department, the main data point utilized in determining domicile ranking is the number of active captives licensed in a domicile. The data shows that Vermont has been steadily growing at a faster pace than its top competitors, Bermuda and the Cayman Islands, in recent years and has now surpassed them, based on the current number of captive insurance companies that are active in the domicile. The data shows Vermont at 639, Bermuda at 633, and the Cayman Islands at 559 captives at the end of 2022.
"We're excited to now be considered the top captive insurance domicile in the world. This status is testament to the work of Vermont's expert regulators and strong network of highly skilled service providers, who have been committed to supporting captive insurance companies for over 40 years," said Governor Phil Scott in a statement.
Vermont's growth has been on the rise in recent years, and the start of this year is no exception. Vermont had reportedly licensed 12 new captives at the end of March 2023, compared to 4 in Bermuda and 8 in the Cayman Islands. On May 12, 2023, Vermont surpassed 1,300 captive insurance companies licensed to date since captive enabling legislation in 1981, a much faster pace than the 1,200 and 1,100 licensed milestones. In the first half of 2023, Vermont has licensed 22 new captives, making Vermont's total number of current licenses 654. The last 3 years have been among Vermont's top 10 years of growth in its 41-year history of licensing captive insurance companies. Recently released Vermont data for 2022 shows $212 billion in total assets under management and $42 billion in gross written premium, significant increases from the prior year and further confirmation of Vermont's new standing.
Vermont expanded its international efforts and has received global recognition in recent years. Vermont was named the "Non-European Union Domicile of the Year" in 2016 and "International Domicile of the Year" in 2020 and 2022. In March 2023, Vermont sent a delegation to Mexico City to conduct an educational forum with the Vermont Captive Insurance Association (VCIA) to raise awareness about captive insurance, the first of its kind in the Latin American region.
"The growth of the industry makes a tremendous impact on a variety of companies and organizations in all sectors from all over the world, but also impacts our small state in a significant way, ensuring the presence of hundreds of good jobs for Vermonters and revenue that contributes directly to programs that impact Vermont's most vulnerable populations," said Commissioner Joan Goldstein, Vermont Department of Economic Development, in the statement.
Vermont remains committed to supporting captive insurance companies in a variety of unique ways, the press release said. Vermont ensures adequate regulatory staffing, with a team of over 30 regulators and in-house examiners dedicated solely to captive insurance companies, with little turnover in leadership throughout its history. Vermont staff also serve on a variety of captive insurance committees and regulatory bodies, lifting up the captive industry and helping to drive the importance of quality regulation.
"Our status as the leading captive insurance domicile is a direct result of the expertise within our robust regulatory framework and the intentional culture within our department to continuously evolve, consider ways we could be better, and work with the industry along the way," said Commissioner Kevin Gaffney, Vermont Department of Financial Regulation, in the statement.
A yearly proactive collaborative "captive bill" is put forward by the VCIA with input from the industry and regulators alike. Given the creation of hundreds of direct, high-paying jobs for Vermonters and the significant tax and fee revenue collected from the program, Vermont legislators recognize the importance of adapting to the changing needs of the industry in real time and clarifying statutes no matter how small the change, the press release said.
"It's no surprise that Vermont has taken the lead in the industry," said Kevin Mead, VCIA president, in the statement. "The 'Gold Standard' infrastructure here of regulators and service providers has provided stable, quality wrap-around support for captive insurance companies for decades and will continue to do so for decades to come."
The VCIA is hosting its Annual Conference through August 10 at the DoubleTree in South Burlington. Over 1,040 attendees from around the world are learning about the latest emerging risks and trends, taking advantage of networking opportunities, and meeting with 70 exhibitors. Vermont leaders and regulators are on hand to meet with prospective and current captive insurance companies and are available for questions.
August 08, 2023