The Green Mountain State's ground-breaking captive statutes in 1981 have helped secure it a prominent place in the captive world.

The Green Mountain State's ground-breaking captive statutes in 1981 have helped secure it a prominent place in the captive world.

Vermont is home to more than twice as many captive insurers as the other 49 states combined, and it is the fourth largest domicile in the world.

Among the significant features of Vermont's Special Insurer Act are: single parent, association and group captives permitted; coverage includes nearly all commercial lines, including workers' compensation, directors and officers, and property/casualty; no approval of rates or forms required; no minimum premiums required; a favourable premium tax structure; and no investment restrictions for pure captives and industrial insured groups.

Statutes alone, of course, do not make a captive home. As pointed out in Vermont's captive brochure which is prefaced by Governor Howard Dean, well known for his enthusiasm for captives: "Vermont's legislative environment is greatly enhanced by a solid infrastructure of 22 approved captive management firms, the world's only government department dedicated solely to captive support services, the Vermont Insurance Institute and the Vermont Captive Insurance Association. Further supported by banks, and law and accounting firms, these four institutions are the cornerstone of Vermont's unique success-driven captive insurance business."

According to the latest figures, the total number of Vermont captive licences issued is 385, of which 305 are active. (See graphs for further details.)

Is further success really assured in the future, that is the question. Current clients believe so. Jaxon White, president of MEDMARC Insurance Company, Inc, remarks that he "would counsel anybody to always take the first and last look at Vermont before selecting a captive domicile."

R.H. (Rick) Hamilton, president and general manager of CSX Insurance Company, has the following to say. "CSX Corporation established its captive in 1987 after conducting a comprehensive analysis of both offshore and onshore domiciles. Ultimately, we decided on a Vermont domicile because of Vermont's flexible, service-oriented regulatory approach and the extensive support structure of captive related firms, especially the Vermont Captive Insurance Association. Today, the reasons for choosing a Vermont domicile are even more persuasive, to the point that we located employees in Burlington to manage our captive in 1993."