CAPTIVE DEVELOPMENT
of all offshore fi nancial centres). The offshore domiciles all offered the low tax and favourable regulation burden that captive owners appreciated. But among fi nancial and legal executives, there was often an unfavourable reaction to the label ‘tax haven’ that was applied by detractors of offshore domiciles.
That was the reason for the beginning of the onshore domicile development in the US, initiated by an insurance commissioner and a few prospective captive owners in Colorado. The basic premise: specialised statutes offering relief from unnecessary regulation on commercial insurance and favourable attention by insurance regulators to the needs of captive owners, was picked up and developed in Vermont and other states. By then the importance of marketing to attract captives had taken hold, a specialised method that in itself is an innovation in the world of insurance.
Lured by Vermont’s success in attracting captives and their associated fees, premium taxes and work for locals, many other US states created similar legislation and opened their doors for business. Some of the
new ones are becoming specialised: smaller captives in the western states, for instance. In the face of this competition between domestic domiciles, those recognised as offering best practices in licensing, regulation, and examinations will win out over the others.
Captive development has been marked by a few pioneers starting something, and then a few others taking the risk to follow their example. Once under way and proven by the acceptance of legitimate business purpose, sometimes helped by winning a tax case, captives in their many forms and models continue and increase in numbers and importance, year after year. I used to think this continued growth was due mainly to the hype and promotional efforts of aggressive service providers and domicile marketers, but maybe it has something to do with the inherent attraction of do-it-yourself risk fi nancing. ●
Hugh Rosenbaum is a risk management and captive insurance expert. He can be contacted at:
hughro2@yahoo.com
CICA | Forty years of captive leadership
27
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132