Dan Towle
Director of financial services, State of Vermont
I’m asked frequently what it is about Vermont that has made it the captive domicile of choice for nearly 900 captives, 42 of the Fortune 100 companies and 18 of the Dow 30 companies. I think it comes
down to three key factors—security, stability and service.
Security
Vermont is a small rural state. When people think of Vermont, they
think of skiing, covered bridges, maple syrup and beautiful autumn foliage. We are certainly that. What most don’t know, however, is that one of Vermont’s lesser known attributes is that it is a global leader in a cutting-edge sector of the insurance industry—captive insurance.
In fact, Vermont wrote the book on captive regulation. Since 1981,
Vermont’s regulations have been the standard—the ‘gold standard’ as described by the press—for states considering a model for the industry. When other states enact captive legislation, Vermont’s legislation is frequently used as the template.
Right from the outset, the captive industry in Vermont has enjoyed extraordinary support from our governor and the legislature. This has manifested itself in regular reviews of the regulation surrounding the industry in order to improve and fine-tune it according to developments in the market. In addition, the industry enjoys unparalleled bipartisan support throughout state government.
Examples of this supportive environment include a law passed last year
that provides a ‘tax holiday’ for new captives formed in 2009 and 2010, despite a reduction in overall state tax revenues. This year is no exception, with new legislation proposed to streamline mergers among captives. The legislature is also proposing other widely supported technical amendments to keep Vermont at the forefront of captive legislation.
Simply put, Vermont’s captive laws work. This means that as your captive matures, so do Vermont’s captive regulations, making it a dynamic and evolving partner keeping pace with the changing economic times and circumstances. Risk isn’t going away, and neither is Vermont’s commitment to maintaining the best captive regulations in the world.
Stability
Vermont arguably has the most stable regulatory environment in the world. Since 1981, only three individuals have led the state’s captive insurance division. Currently, deputy commissioner David Provost, a 20-year industry veteran, and Peter Raymond, director of captive insurance, with 21 years in the business, head the most experienced and knowledgeable regulatory team anywhere. This means that you will receive some of the best advice you can get in the initial formation process and ongoing support of your captive programme. They are supported by 26 individuals, making it the largest and most comprehensive regulatory team in the industry.
Vermont’s captive infrastructure is also experienced, sophisticated
and diverse, with 15 approved captive management firms. The options range from the largest insurance brokers in the world to
US Captive . April 2010 35
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