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Travis Wegkamp, captive director at the Utah Insurance Department, explains how the diverse nature of Utah’s economy has seen it grow into a world leading captive domicile
Travis Wegkamp, captive director at the Utah Insurance Department, explains how the diverse nature of Utah’s economy has seen it grow into a world leading captive domicile
Since the passage of captive legislation in the state in 2003, Utah has grown to be the second largest captive domicile in the nation and fourth largest in the world.
This growth has come steadily, and at times exponentially, due to the favorable business environment and strong economy of the State of Utah.
Much like the diverse nature of Utah’s economy, those companies that have chosen to establish their captives in the state comprise a diverse selection of industries that add to the dynamic nature of our local captive industry.
While no one industry truly dominates the captive landscape here, an abundance come from the healthcare, manufacturing, professional services, and construction industries. With real estate, financial, and retail related industries following closely behind.
This wealth of diverse and unique companies from around the country with captives here in Utah has provided our staff with a breadth of knowledge and expertise in adapting and responding to their various needs and differing insurance programmes.
This has made Utah uniquely capable and willing to work with organisations seeking to be at the forefront in the innovative use of their captives. The captive industry in Utah continues to play a role in the economic growth and stability of the state.
Utah has been a popular choice for smaller captives looking to get their feet wet in the industry. We attribute much of this popularity to our captive legislation that does not impose a state premium tax on captive insurers.
Instead, our legislators chose purposefully to only impose a small $5,000 annual fee. It was the thought and purpose of our captive legislation and flat fee that, rather than attempt to simply fill the state’s coffers with premium taxes from captive insurers, we would promote the industry and use it as a method for attracting other highly educated, stable, and well-paying jobs to the state that service the captive industry.
That foresight and forward thinking continues to bear fruit. Since its inception in 2003 the captive industry continues to flourish and provide a noticeable economic benefit to the State of Utah.
Thanks to strong growth, by 2008 our captive industry was providing over $5 million a year in economic benefit to the state, and since 2011 that amount has consistently been well over $10 million a year, with a high of over $22 million.
Additionally, cash and other invested assets of Utah captive insurers have a significant impact on the state’s economy with nearly $800 million being held by local financial institutions, as reported by our captive insurers.
These financial markers of the economic benefit of captive insurers to the State of Utah are but one indicator of the strength and quality of the captives domiciled here.
For the past several years Utah captive insurer assets have been north of $3 billion and gross written premiums for those years were just under $1 billion, as reported by our captive insurers.
Those that have formed and operated a captive insurance company here in Utah have discovered a truly symbiotic relationship, where the strength and diversity of our economy and fair regulations have allowed them to run a profitable and beneficial captive programme to their benefit, and the state’s as well.
