The Vermont Department of Economic Development announced today that the State of Vermont licensed 38 new captive insurance companies in 2020, Vermont is now home to 589 licensed captives, consisting of 564 active and 25 dormant captive insurance companies.
“It is great news that Vermont has remained a consistent leader in the captive industry during the coronavirus pandemic,” said Commissioner of Economic Development Joan Goldstein. “Captive insurance plays a key role in our efforts to strengthen the state economy and its growth is welcomed as the pandemic continues to impact every sector of our economy.”
The new captives were licensed in healthcare, real estate, manufacturing, insurance, transportation, technology, construction, and professional services. New and notable companies this year include the University of Southern California, State Street Bank, Saputo, and the Blackstone Group. At least six of Vermont’s new captives in 2020 were formed by companies with international roots, —including Canada, Germany (2), Sweden, Dubai, and Australia.
“Vermont’s 2020 licensing activity in many ways reflected the changing insurance environment,” said Brittany Nevins, Captive Insurance Economic Development Director. “We licensed eleven new captives in the fourth quarter alone. The market that began hardening in 2019 continued rapidly throughout 2020 and now into 2021. Before 2021 began we had more captives in process for licensing than we had licensed total in the first month of 2020.”
“The particularly hard market conditions in commercial property insurance influenced the number of captive formations in the construction and real estate sectors,” said Dave Provost, Deputy Commissioner of Captive Insurance. “Nearly a third of the new formations this past year had parents from those industries, with price and availability commonly noted as drivers for the captive. “The global pandemic has not stood in the way of Vermont’s continued ability to be responsive, efficient, and collaborative.”
“As productive as 2020 has been with welcoming new captive companies to Vermont during trying times, the Vermont Department of Financial Regulation has followed its gold standard process for licensing,” added Sandy Bigglestone, Director of Captive Insurance. “One of the best practices proven to be effective is a pre-application meeting with the regulatory leadership team and the prospective company. Throughout 2020, despite not traveling and meeting people face-to-face, every new application included an introductory phone call or virtual meeting.”
“Vermont continues to see exponential growth in numbers of licenses and interest around the country and around the world,” said Rich Smith, President of the Vermont Captive Insurance Association (VCIA). “The stability, knowledge and experience Vermont has to offer continues to be steadfast through challenging times.”
Vermont has licensed a total of 1,197 captive insurance companies since 1981 and remains, by far, the largest U.S. domicile for captive insurance and third largest in the world. With an active pipeline of prospective new captive insurance companies already underway for 2021, the state expects continued growth in the coming year.