Vermont remains optimistic for 2015 despite a slow 2014 for captive formations.
In 2014, the state signed up 16 new captives, including 10 pure captives, two sponsored, two special purpose financial insurers, one association and one risk retention group. Two new captives were redomesticated from Bermuda and Delaware.
But it also lost 17 captives last year, thanks to a soft market and competition from other domiciles.
It wasn’t all bad news for Vermont in 2014. The state is projecting a $2 billion increase in gross written premium to almost $30 billion.
“As always, Vermont added quality captives to its portfolio,” commented Len Crouse, a partner at JLT Towner Insurance Management. “The legislature understands the value of Vermont’s captive business, and legislators and state regulators are always working to improve regulations.”
Following the Vermont Captive Insurance Association-sponsored annual Legislative Day, Crouse said the state is considering halving the capital requirement for sponsored captives to $250,000, and reducing the number of incorporators needed for captive formation from three to one.
Vermont’s lawmakers may also look at risk retention group governance standards promulgated by the National Association of Insurance Commissioners to identify exemption thresholds, added Crouse.
