“Clearly, Vermont's success is why everyone is going after” captives, he said, noting that even New York is “talking about redoing its captive law, and when you get New York into the game, you're starting to play in the big leagues.”

Mr. Modecki, principal of Carl A. Modecki Consulting Services in Tallahassee, Fla., said that not only has the phenomenon been noticed, but the topic is being added to CICA's members-only meeting, set for Oct. 14 in New York.

He said Leonard Crouse, director of captive insurance for the Vermont Department of Banking Insurance and Securities, has agreed to participate in the session, “so it's clearly a topic that's out there.That people are doing a two-day [redomestication] seminar just shows how much interest there is.”

Clayton Ingram, director of business development for South Carolina's insurance department, said he is a scheduled speaker at the redomestication seminar, which was the brainchild of the SCCIA. “Since we're the new players in the game and we weren't at the table before, people who located elsewhere may want to reconsider their move,” he said.

Mr. Ingram said South Carolina “gets calls all the time” from captives interested in redomesticating, many of which are now offshore. “For most of these groups, there is really no advantage to being offshore anymore,” he said. “Most of them have elected to be taxed as U.S. corporations anyway, and the time and expense of operating offshore have outweighed whatever positives there were in the beginning.” South Carolina, he said, has structured its laws “to make it possible to do pretty much anything onshore that you can do offshore,” he said.

Mr. Crouse of Vermont, however, is troubled by the seminar's focus. “It's nothing that's ever been done in this business. Never,” he said. “If a company wants to redomesticate, there is a reason for it. This sets a precedent and it's something that's not done.”

If a captive already established in another domicile “were to call and ask me why they should go to Vermont, I'd tell them, one-on-one,” he said. “But I'm not going to have a seminar saying, 'Move your captive from Hawaii or move your captive from Bermuda and come to Vermont.' The brokers will bring those captives in.”

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, May 20, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.