Vermont's new captive laws will be spotlighted at the domicile's annual conference, as Lisa Ventriss explains.

The spotlight at this year's annual conference of the Vermont Captive Insurance Association (VCIA) will be on two important new captive legislation initiatives which have just been passed into law. This new legislation will add further to the attraction of Vermont as a captive domicile in the 21st century.

We have selected Reaching for the New Millennium as the theme for this our 14th annual conference, scheduled for 17-20 August at the Sheraton Hotel & Conference Center in Burlington, Vermont. This theme has been chosen as a way to highlight many of the important emerging trends and challenges that are facing the captive and alternative risk transfer marketplaces in the waning months of the 20th century.

Vermont is the largest onshore captive domicile and the fourth largest domicile in the world. It has a reputation as a stable regulatory environment which is complemented by supportive and responsive policymakers.

The new laws, which have now been signed by the governor, permit the establishment of two new types of captives in the state: branch captives and sponsored captives.

Branch captives: This is a structure that will allow offshore captives which wish to remain offshore to open a branch in Vermont and to write their employee benefits business through that branch. We believe this facility will be very attractive to companies whose employee benefits plans have ERISA approval.Sponsored captives: These are similar to rent-a-captives, but the concept is designed to focus on the insured, instead of the entrepreneur. Instead of brokers, three types of sponsor are eligible: traditional insurance companies, reinsurance companies and approved Vermont captives that are fronted by an admitted insurer.

With sponsored captives, we are trying to open the benefits of captives to mid-market companies, typically those writing less than $1 million premiums. This way insureds can get more control of their own programmes than usually happens with a conventional programme and gain some administrative and cost savings without the expense of setting up their own captives.

Sponsored captives will only be able to write their own risks, and we also believe that the structure will help to make sure that the business of each client is segregated through a protected cell to avoid the situation which happened in the past with some offshore rent-a-captives where the companies did not know they were in a particular vehicle.

Conference topics
Vermont's secretary of commerce and community development, Molly Lambert, and insurance commissioner, Betsy Costle, will present the opening remarks to the general session of the conference on Wednesday. They will be followed by the keynote speaker who is Norman Barham, vice chairman of Marsh, Inc and a director of Marsh & McLennan Companies, Inc. He will present his view on competition, innovation, changing marketforces and global trends as we reach for the new millennium. In his capacity as chairman of the Innovation Council, a global group comprising senior level management charged with developing new services and products, Mr Barham will offer unique perspectives on issues of importance to the captive industry.

VCIA members who are familiar with the critical issues of the day have selected and developed a wide range of topics for the conference seminars. Sixteen different sessions range from basic level captives to advanced topics, such as insurance, risk management and the internet, the uses of third party business and an in-depth discussion of the new legislation creating sponsored captives.

Industry experts will discuss the wider issues affecting captives, such as whether the recent consolidation in the broking, insurance and reinsurance arenas offer risk managers and other insurance buyers more opportunities or less choice, and the effect of the new global economy.

Thursday morning a VCIA members' breakfast provides a demonstration of the Vermont Insurance Institute's on-line insurance services. After the final seminar sessions, conference participants - and we expect there to be around 800 - will attend the banquet dinner, complete with presentations of the captive crusader award, presented to a member who has made significant contributions to the association, and the insurance service award, presented by the VCIA's board of directors to the person who has demonstrated significant leadership and made lasting contributions to the overall vitality of Vermont's captive industry.

Lisa Ventriss is president and chief operating officer of the Vermont Captive Insurance Association. Tel: +1 802 658 8242; fax: +1 802 658 9365; e-mail: