"We are committed to making sure Vermont's captive law keeps pace with the needs of the industry," said Governor Shumlin. "We welcome the industry's input to make sure our law is the 'Gold Standard' for regulation."
"We had a great first quarter with the licensing of eight new captives," said David Provost, Vermont's Deputy Commissioner of Captive Insurance. "2011 was only the 6th year in our history that Vermont surpassed 40 new captives and this first quarter makes for the strongest start since 2005."
Five of the newly licensed captives were pure, with one special purpose financial captive and two sponsored captives making up the balance. Some notable companies in the group of new licensees include Hormel Foods Corporation, ConocoPhillips Company and Deutsche Bank.
"We are encouraged by this level of new captive formations and have a solid pipeline of prospects, in fact we have licensed two more captives in the second quarter already," said Dan Towle, Vermont's Director of Financial Services. "It's also encouraging to see the continued interest of companies looking to re-domesticate to Vermont, which has been a growing trend," he added.
The new captive insurance legislation formally changed the name of the Banking, Insurance, Securities and Healthcare Department (BISHCA) to the Department of Financial Regulation. It also expanded the criteria for eligibility for cell participants and adds more options for minimum capital and surplus requirements by allowing the use of a trust.
Captive insurance is a regulated form of self insurance that has been around 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 typically used for corporate lines of insurance such as property, general liability, products liability, or professional liability. Growth sectors of the captive insurance industry include professional medical malpractice coverage for doctors and hospitals, redomestications and the continued trend of small and mid-sized companies forming captive insurance companies.