Vermont licensed 25 new captives last year, an increase on the 24 new captives licensed in 2017.
Figures from the Department of Financial Regulation revealed that of the 25 new licenses, 12 were pure captives, four were risk retention groups, three were sponsored captives, two were industrial insured captives, two were special purpose financial insurers, one was a branch captive and one was an affiliated reinsurance company (ARC).
The ARC, MAPFRE Re, is the first of its kind to form in Vermont and follows the legislation that established the new type of captive structure in the state in 2018.
The ARC legislation establishes the state as a viable, domestic alternative for US companies that are currently reinsuring offshore and may now be subject to the Base Erosion and Anti-Abuse Tax included in the Tax Cuts and Jobs Act of 2017.
Vermont now has 1,137 total captive licenses overall, with 558 active captives–making it the largest US domicile and the third largest domicile in the world.
The Green Mountain State continues to see strong growth from the healthcare industry, with six new healthcare captives licensed last year.
There were also new captives licensed from the insurance, retail, manufacturing, professional services, real estate, entertainment, and energy industries.
Ian Davis, director of financial services, commented: “The continued growth of hospitals and doctors’ groups forming Vermont captives for medical professional liability coverage has been very positive.”
“We are also seeing a considerable amount of interest from mid-market companies, and expect both trends to continue in 2019.”
Dave Provost, deputy commissioner of captive insurance, said from a regulatory standpoint the state prides itself on “keeping pace with the needs of the industry”.
He added: “The regulatory enhancements we were able to introduce last year highlight our state’s ability to adapt quickly in support of the captive insurance industry.”