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Review of captive law a wise move in Colorado


While not a 180-degree turn, we think Colorado insurance regulators' consideration of reviving the state as an attractive captive domicile is significant.

As we report on page 28, Colorado regulators are talking to officials in other domestic domiciles to find out, among other things, why those domiciles have been so successful in attracting captives.

That Colorado regulators are even considering extending a welcome mat to captives is a big change for the state. While Colorado in 1972 became the first U.S. state to pass captive legislation and attracted about two dozen captives within a few years, by the mid-1980s Colorado withered as a domicile.

Candidly put, its insurance regulators lost interest in captives and no effort was made to keep its captive law competitive with other domiciles.

Now, struck by the success of such relatively small states as Vermont and Hawaii in attracting captives, and the economic benefits captives have brought to those states, officials are considering whether it is time to update Colorado's captive law and lay out a fresh welcome mat to captive sponsors.

We hope Colorado regulators reopen the door to captives. This is the kind of business--the creation of high-paying jobs and a new source of premium tax revenue--that every state should crave. And for those companies that want their insurance subsidiaries to be close to corporate headquarters, an expansion in the number of domiciles clearly is in their interest.