MONTPELIER, VT – Governor Phil Scott formally announced that the Department of Financial Regulation licensed Vermont’s first affiliated reinsurance company (ARC). The new company, MAPFRE RE Vermont Corporation, was formed by MAPFRE RE, a global reinsurer that conducts business in more than 100 countries. The newly formed ARC is the first of its kind and comes less than a year after Vermont passed legislation establishing this new type of captive structure.
“I am proud that we were able to work quickly and collaboratively to pass a consensus bill that creates a viable U.S. alternative for companies like MAPFRE RE, while also maintaining our high standards for regulation and providing a fiscal benefit to the state,” stated Governor Phil Scott. “We are happy to welcome them to Vermont.”
As the first ARC to form in Vermont, MAPFRE RE establishes the state as a viable, domestic alternative for U.S. companies that are currently reinsuring with affiliates outside of the U.S. and may now be subject to the Base Erosion and Anti-Abuse Tax (BEAT) included in the Tax Cuts and Jobs Act of 2017.
“The experience, consistency and responsiveness of Vermont’s regulatory regime helped to make this a very straightforward process,” said MAPFRE RE CEO Eduardo Pérez de Lema . “We are delighted that Vermont was able to work quickly to provide a U.S. solution for MAPFRE.”
“The industry approached us with a need for a U.S. alternative,” said David Provost, Deputy Commissioner of Captive Insurance. “It’s something we’ve been considering for some time, but the imposition of BEAT taxes on reinsurance between U.S. and foreign affiliates made the timing critical. These companies are akin to a hybrid between captives and traditional insurance. Like captives, they will be limited to reinsurance of affiliates, but they will be regulated in accordance with NAIC accreditation standards like a commercial reinsurer would be.”
Captive insurance is a regulated form of self-insurance that has existed 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 commonly used for corporate lines of insurance such as property, general liability, products liability, or professional liability.
For more information on Vermont’s captive insurance industry, visit www.vermontcaptive.com, call Ian Davis at 802-828-5232 or email ian.davis@vermont.gov.
The Department of Economic Development operates within the Agency of Commerce and Community Development, whose mission is to help Vermonters improve their quality of life and build strong communities.
About MAPFRE
MAPFRE RE, Compañía de Reaseguros S.A. is the 17th largest reinsurer in the world, with more than $4.8 billion in gross written premiums and more than $253 million in net earnings as of December 31, 2017. MAPFRE RE has 386 employees and 19 offices around the world. MAPFRE Re is part of the MAPFRE Group, a global insurance company with a worldwide presence. MAPFRE is the benchmark insurer in the Spanish market and the largest Spanish multinational insurance group in the world. The company is the main multinational insurer in Latin America and is among the Top 5 largest Non-Life European insurers by premium volume. MAPFRE employs more than 36,000 professionals globally and in 2017, MAPFRE’s revenues surpassed $34 billion, and net earnings were above $850 million. In the U.S., MAPFRE Insurance serves policyholders in 14 states across the United States, including Vermont, through a network of more than 5,000 independent agents and brokers. MAPFRE Insurance is the 19th largest provider of personal automobile insurance and the 20th largest personal lines insurer in the United States. MAPFRE Insurance is also the largest private passenger automobile insurer, homeowners’ insurer and commercial automobile insurer in Massachusetts. MAPFRE Insurance provides a full range of insurance products, including coverage for automobiles, homes, motorcycles, watercraft and business. MAPFRE, MAPFRE RE, and MAPFRE Insurance are rated A (Excellent) by A.M. Best Company.
