The Vermont Banking, Insurance, Securities and Health Care Administration has released new data that shows the state has added 41 new captive insurance companies in 2011. The state is home to more than 590 active captive insurance groups currently, with a total of 952 licensed insurers.2011 was the sixth consecutive year in which Vermont added more than 40 new captives to the market, showing the growing trend of captives in the state’s insurance industry.
Captives have always been popular in the insurance business, but more insurance organizations are opting to form or procure captives as a way to manage higher degrees of risk associated with a fragile economy. David Provost, Deputy Commissioner of Captive Insurance for the state, claims that more high-quality insurance companies are forming captives, which is good news for the health of the state’s industry and market. Indeed, Vermont is one of the few states that are seeing healthy returns from the higher number of captives being formed within its borders.
Vermont has already liscensed two new captives this year and expects to breach the 40 licensing mark again before the year is over. The state’s Department of Insurance believes that these captives are bringing more dynamism to the state’s insurance industry and allowing insurers to conduct business more flexibly. In some cases, this can translate into savings on a variety of different policies for consumers.