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Guernsey must pay attention to UK’s ILS push, says McLaughlin
27 March 2017 | St Peter Port
Guernsey should take the UK ‘seriously’ as it sets up an insurance-linked securities (ILS) regime in London, according to Stewart McLaughlin, executive director at Aon Risk Solutions Read more

Grant Thornton Cayman founding partner retires
27 March 2017 | Cayman Islands
Grant Thornton’s Terry Carson has retired, stepping down from his role as founding partner Read more

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Can a captive $ave us from ourselves?
Feature: With a solid enterprise risk management strategy, a captive can increase in value and reputation, says Michael Zuckerman of Temple University Read more

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Domicile profile
Latest news
Vermont
After 36 years of captive business, Vermont boasts a culture of legislative change, and still has a few tricks up its sleeve. Dan Towle and David Provost explain
How would you characterise Vermont’s 2016, as a domicile?

Dan Towle: Last year marked the 35th anniversary of the implementation of Vermont’s landmark 1981 captive insurer statute and we had another solid year of licensing new captives of all different sizes, types, and industries. We enacted new captive insurance legislation to further strengthen our captive law and have continued to see strong interest across all lines of business.

In 2015, Vermont licensed 33 new captive insurance companies, made up of 12 pure captives, seven risk retention groups (RRGs), seven sponsored captives, four special purpose financial insurers, two industrial insured captives, and one association captive, as well as 11 redomestications. That is the largest number of redomestications to ever occur in a single year in Vermont.

In 2016, we licensed 26 new companies, one association captive, one industrial insured and one sponsored, plus three special purpose financial insurers, five RRGs, and 15 pure captives.

From those figures, we licensed eight healthcare captives, five manufacturing, four in the insurance sector, two each for construction, real estate, retailers and ‘other’, and one in each in finance and in our ‘other’ category. It is also important to note, that with the eight new captives in healthcare, that the healthcare sector is now Vermont’s largest sector, surpassing manufacturing.

What factors contribute to the success of Vermont as a captive domicile?

Towle: Our fully developed infrastructure and firm-but-fair, flexible regulation. Our team of regulators has more than 300 combined years of experience in auditing, captive management and captive regulation. We are accessible and make it a point to respond at the speed of business.

We work with captive owners to develop collaborative approaches for regulation that protect the policyholders while recognising the special purpose for which the captive is formed. We have been independently recognised for our efficient examination process.

Vermont’s infrastructure of captive professionals is arguably the most experienced and sophisticated in the world. The Vermont Captive Insurance Association (VCIA) is vital to the success of Vermont. VCIA members are active in keeping our statute current and our voice heard in Washington, at the National Association of Insurance Commissioners, and wherever captives are threatened.

What trends have you seen in the captive insurance space, and do you think these will continue into 2017?

David Provost: As expected, healthcare led the way with eight new captives. That category encompassed liability coverage for healthcare providers and assisted living homes, and medical stop-loss programmes for employer groups. I expect the healthcare market for captives to continue to expand, although this year might just be a wait-and-see period with the new administration in Washington DC.

Manufacturing came in a strong second with five new captives, a bit of a surprise—I hope that continues.

Are there any regulation updates on the cards for Vermont this year? What else can the industry expect to see?

Provost: Making advancements to our captive insurance law is an annual tradition in Vermont. It is important to update Vermont’s captive legislation annually for two main reasons. First, Vermont wants to lead the captive insurance marketplace in providing the best rules and regulations to keep up with this ever-evolving industry. Captives are by nature flexible and entrepreneurial.

Second, bringing legislation to the state legislature every year allows our policymakers a chance to shape this important industry in Vermont. Our 2017 captive bill was introduced to the legislature the week commencing 16 January. This year’s bill expands the options for accounting methods used by captives, proposes an additional tax credit for new companies, and allows for the licensing of agency captives in Vermont. The bill also expands the dormancy option to all types of captives and addresses some conflicting language regarding auditor partner rotation for risk retention groups.

This legislation makes Vermont more attractive and sends a strong message to the industry that we are committed to always improving our captive insurance law.

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Guernsey must pay attention to UK’s ILS push, says McLaughlin
Guernsey should take the UK ‘seriously’ as it sets up an insurance-linked securities (ILS) regim Read more

Grant Thornton Cayman founding partner retires
Grant Thornton’s Terry Carson has retired, stepping down from his role as founding partner Read more

Drinker Biddle hires insurance pro in California
Dan Brown is based in the firm’s San Francisco office. He was previously a partner at Dentons wher Read more

Christina Kindstedt joins Advantage Insurance
Advantage Insurance has appointed Christina Kindstedt as senior vice president Read more

Delaware to allow captives to go dormant
Arkansas and Montana introduced legislation proposing a dormant status for captives last month Read more

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