Vermont licenced 45 new captive insurance companies in 2021, making it the fourth-highest year of growth on record for the domicile.
Vermont, which is the largest captive domicile in the United States, is also the oldest having recently celebrated its 40th year of captive formations.
The state now has 620 licenced captives, with 589 active and 31 dormant. Of the 589 active captives, 52 are sponsored cell captives which host nearly 500 individual cells as well.
This is a net increase of 31 captives in 2021. By comparison Vermont only had a net increase of four captives in 2020.
“Not only are new captives forming at a rapid rate, but fewer captives have been dissolving this year than we typically see,” Brittany Nevins, captive insurance economic development director explained.
“We issued 45 new licenses, and only 14 captives were dissolved due to mergers, acquisitions, and other business reasons. This speaks to the strength of captive insurance as a long-term risk management tool and is something we expect to continue to see with the continuation of the hard insurance market.”
The growth of cell captives has continued in Vermont with nine of the 45 new formations of sponsored cell captives. David Provost, deputy commissioner of captive insurance, credits some of this increase to legislative updates.
“Vermont continues to see the growth in sponsored cell captives following consistent legislative updates over the recent years,” Provost said. “Many companies are realising the opportunity and flexibility the cell structure provides for their company.”
The newly licenced captives cover a host of different industries with healthcare, real estate, manufacturing, insurance and transportation being the most common.
In Vermont’s 40 year history the domicile has licenced a total of 1,242 captives to date, and expects more growth in the coming year.
Vermont Governor Phil Scott praised the captive industry and this this recent growth, calling the state a global leader.
“Vermont continues to be a global leader in the captive industry and has proven, once again, to deliver high-quality regulatory oversight and partnership that also meets the unique needs of captive businesses,” Governor Scott said.