Captive formations have been proceeding at a rapid clip in Utah, Delaware, North Carolina, Tennessee and Oklahoma — the five U.S. domiciles with the fastest captive growth last year.

Utah was No. 1 in new captive licenses issued in 2014 with 106, according to the latest Business Insurance annual survey. Delaware followed with 87 new captives; North Carolina, 49; Tennessee, 40; and Oklahoma, 37.

Vermont remains the largest U.S. domicile with 587 captives, followed by Utah, 422; Delaware, 333; Hawaii, 194; and District of Columbia, 191.

In Utah, captive formation has surged amid recognition that the state is a “great place to do business,” said David Snowball, Utah's director of captive insurance in Salt Lake City.

“We try to answer questions within a day or two,” he said of efforts to provide quick access when issues arise as well as fair, consistent regulation.

Employers setting up 831(b) captives, also known as microcaptives, are a major factor in Utah's new formations last year.

While official figures are not available, Mr. Snowball estimated 65% to 75% of last year's captive formations were 831(b) captives, which often are attractive to small and medium-size businesses. Parents of such captives can make up to $1.2 million in tax-deductible premium contributions to the captives each year, and such captives' underwriting income is exempt from federal income taxes.

In Delaware, Captive Insurance Director Steve Kinion attributes the state's captive growth to factors that include resources the state has given to captive regulation, which he said signals to prospective sponsors that captives will be “regulated as captive insurers, not as commercial insurers.”

North Carolina's rapid growth is notable since the state first passed captive legislation in 2013.

Since then, North Carolina captive regulators “have gone out of their way” to attend industry events. “They have been fantastic and responsive,” said Martin Eveleigh, chairman of the North Carolina Captive Insurance Association and chairman of Atlas Insurance Management in Charlotte, North Carolina.

An appealing feature of North Carolina's law is a $100,000 cap on annual premium taxes and no annual fees, said Debbie Walker, director of captive insurance.

Texas is another state that saw solid captive growth in 2014 thanks to its passage of captive insurer legislation in 2013. Location was a key reason petroleum company Phillips 66 last year chose the Lone Star State as home for its captive, SHC Insurance Co., said Scott Irwin, the Houston-based petroleum company's principal consultant of corporate insurance.

“We have our headquarters here. It makes (captive) board meetings a lot closer,” Mr. Irwin said.

In addition, being local makes it easier to help shape changes to the captive statute, Mr. Irwin said.

Location matters in Texas, which requires the parent of a captive to either be based in Texas or have a significant operation in the state.

“In Texas, regulators are making a real effort in reaching out. They are sending out staffers to our conferences to meet current and prospective captive owners,” said Josh Magden, president of the Texas Captive Insurance Association.

Captive regulators say that receptivity is deliberate.

“We have applied our customer service to be as open as possible,” said Jeff Hunt, admissions officer of company licensing and registration at the Texas Department of Insurance in Austin.

Mr. Hunt said the openness extends to telling a potential sponsor that its plan won't pass the state's regulatory muster.

“If we think it will not work in Texas, we will make that clear. We want to be honest and straightforward,” Mr. Hunt said.

Several features of Tennessee's captive law, passed in 2011, are attractive, said Joseph Haase, vice president of risk and insurance at Nashville-based health care provider HCA Holdings Inc., which domiciled its Park View Insurance Co. captive in Tennessee.

Attractive features include a maximum of $100,000 in annual premium taxes, reasonable capitalization requirements and responsive regulators, he said.

“The law is very good. Plus, this is a pro-business state, and the captive regulators are both responsive and accessible,” said Peter Foley, president of Onyx Insurance Co. Inc., a Risk Retention Group.

The RRG, licensed in Tennessee in 2013, provides commercial auto liability coverage to its 415 taxi and livery company policyholders.

“We have had across-the-board growth,” said Michael Corbett, Tennessee's director of captive insurance in the state's Department of Insurance and Commerce in Nashville.

In Tennessee, regulators are “open to out-of-the-box questions. They are interested in new ideas,” said Mike Serricchio, a senior vice president in Norwalk, Connecticut with Marsh Inc.'s Captive Solutions Group.