UTAH
“Utah has followed a strategic development path where experience has been developed with single-parent, pure captive structures before transitioning to more complex facilities such as sponsored captives or special purpose vehicles.”
as a distribution hub. The state capital, Salt Lake City, is central to all major western US markets. Utah businesses, residents, and visitors all benefit from the state’s superb transportation infrastructure and its highly efficient systems for moving people and goods. Salt Lake City and the Wasatch front constitute the major population centre for the state. The Salt Lake City international airport is located about 15 minutes’ northwest of the city centre and is a delta hub. It offers 48 scheduled daily flights serving more than 90 cities with non-stop flights. More than half of the entire US population can reach Salt Lake City within a two-and-a-half hour flight.
For those who choose to spend some extra time there, Utah offers extraordinary vacation and tourist venues. Eleven major ski resorts and 50 golf courses are within an hour’s drive of the Salt Lake City airport. The state is home to five national parks, seven national monuments, two national recreation areas, six national forests and 43 state parks. There are also rich artistic and cultural resources including symphony orchestras, and opera and ballet companies. The Sundance Film Festival, Utah Shakespearean Festival, and Mormon Tabernacle Choir are Utah treasures.
Southern Utah contains the greatest concentration of national parks in the US. The state’s five national parks—Arches, Bryce Canyon, Canyonlands, Capitol Reef and Zion—are regularly recognised as among the most spectacular and beloved national parks by visitors in the US and from around the world. Moab is a popular destination for mountain biking, hiking, and outdoor recreation in some of the most scenic venues in the world.
How many captives are licensed in Utah? Initial growth was slow but consistent. The first captive was licensed in 2003. Another one received its certificate of authority in 2004. Since then, the number of licences issued has accelerated. In 2008, 32 licences were issued, followed by another 33 in 2009 and 54 in 2010. But in 2011 a new record was set, with 69 new captive licences issued.
The number of captives actively writing business is now 239. Another 14 are currently pending review and licensing.
How responsive is the captive division to requests? The captive division recognises the need to process information as
128 CICA | Forty years of captive leadership
quickly as possible to meet the dynamic needs of the businesses we serve. To that end, technology tools are being constantly improved to provide consistent, accurate, and timely responses. We use a customer relationship management system to follow events for each captive, an electronic archival system for document storage, electronic filing (annual statements, formation applications, business change requests), and extensive emails for communications.
These tools allow us to review and respond to new captive applications usually within two weeks. Most business plan changes, distribution/ dividend requests, treaty and contract changes can be reviewed within one or two days, depending on the complexity of the documents.
Where are the parent companies located? The parent organisations of our captive insurers are located in 28 of the 50 states. About two-thirds of the parents are located in the western region of the US. The companies represent a wide diversity of industries. The largest industry segments in Utah are real estate, healthcare and manufacturing. The majority of the companies are from the middle market tier, in terms of annual revenue and number of employees. One of the most fascinating aspects of working with these companies is the opportunity to meet them periodically and discuss their business operations and concerns.
What is Utah’s vision for the future? We are extremely optimistic about the future opportunities for growth in the captive industry. Most of the largest companies in the US have already formed captives to supplement their commercial coverage and directly manage their risk portfolios. As the experience and number of service providers continue to expand, these same captive opportunities are being presented to thousands of additional companies in the middle market.
Our future challenge as a regulatory partner in this industry is to grow and develop the necessary expertise and capacity to meet the needs of those who will look to us for solutions to the concerns that would, otherwise, keep them awake at night. l
Ross Elliott is captive insurance director at the Utah Insurance Division. He can be contacted at:
rcelliott@utah.gov
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