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Vermont licensed 22 new captive insurance companies in 2019, and expects continued growth amid a hardening market, according to the state’s department of economic development Monday.
However, some 17 captives closed during 2019, which brings the total number of active captives to 559, one more than in 2018, but down from 566 active captives at the end of 2017 and 584 at the end of 2016, according to department figures.
The new licenses were made up of 14 pure captives, four sponsored captives, two risk retention groups, one special purpose financial insurer and one industrial insured captive, according to the statement.
“Vermont’s 2019 licensing activity in many ways reflected the changing insurance environment,” said Ian Davis, director of financial services, in the statement. “We licensed nine new captives in the fourth quarter alone and, given the hardening market, we expect the momentum to continue on into 2020.”
Vermont has already licensed four new captives in 2020, bringing its total number of active captives to 563, Mr. Davis said via email.
The new captives were licensed in health care, real estate, manufacturing, insurance, transportation, technology, construction and professional services.
Companies setting up captives in the state included Massachusetts Mutual Life Insurance Co., KPMG LLP, University of Vermont Health Network Inc., Stamford Health, RELX Inc. and Fortive Corp.
Six of Vermont’s 22 new captives were redomestications from other jurisdictions, including New York (3), Bermuda (2) and Switzerland (1), according to the department figures.
Interest in sponsored captive programs from small and mid-sized companies continues to grow, said Dave Provost, deputy commissioner of captive insurance.
“When you factor in the four new sponsored captives, Vermont is now home to 37 cell facilities housing well over 200 cells, and the concept is only becoming more popular,” he said in the statement.
Vermont Secretary of State Jim Condos and Department of Financial Regulation Commissioner Michael Pieciak on Wednesday signed a memorandum of understanding outlining collaborative efforts to explore the use of blockchain technology in the digital record-keeping practices of the captive insurance industry.