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Vermont says increased domiciles good for captive industry overall: VCIA conference leaders


BURLINGTON, Vt.—As the Vermont Captive Insurance Assn. gathers in Burlington for its annual conference, Vermont captive industry leaders suggest that the formation of captive domiciles in other states—including Connecticut, which licensed its first captive last week—benefit Vermont and the captive industry overall.

“Competition's good,” said Daniel D. Towle, director of financial services in the Vermont Department of Economic Development. “We don't have any problem with that.”

Sandra A. Bigglestone, director of captive insurance in the Vermont Department of Financial Regulation, said that new domiciles often look to Vermont in crafting their captive laws. “To a certain extent they're calling us and they're asking us questions,” Ms. Bigglestone said. “They're asking us for help and we're happy to share our knowledge.”

VCIA President Richard Smith noted that many captives licensed elsewhere in the U.S. are managed by Vermont-based captive managers. “I consider Vermont a center of excellence in the industry,” he said.

As a result, Mr. Towle said, “Generally, Vermont benefits when other states license captives.”


Vermont has 582 licensed captives and has licensed 14 so far in 2012, Mr. Towle said. “We think the market's really heating up,” he said.

Asked whether there are signs of companies using captives to address such emerging exposures as cyber risk, reputational risk or social media risk, Ms. Bigglestone said, “There's a lot of talk about those particular kinds of risks (but) we haven't seen a lot of flow into the captive yet.” Most captive owners are still gathering information on pricing and underwriting those exposures and loss experience before looking to place them in the captive, she said.

“I don't think people move that quickly,” Mr. Smith said. “I think they look at the pricing, look at what the risks are.”

Mr. Towle said most captives continue to be formed to write “bread-and-butter” lines of business such as auto liability, general liability and workers compensation.

VCIA leaders anticipate approximately 1,100 attendees at this year's conference coming from 42 states and Washington, and eight countries, according to Mr. Smith. Of this year's attendees, 25% of those are captive owners, he said.

The 2012 VCIA conference, which began Tuesday, runs through Thursday.