She said that the captive industry is “very busy, and those familiar with the industry know why. It's because the commercial insurance market has hardened significantly, even before Sept. 11.”

Consequently, captives are becoming “much more attractive to a variety of different companies,” she explained.

Ms. Lambert most recently served as secretary of commerce, a cabinet position, for the state of Vermont. Within the agency she oversaw the departments of economic development, housing and community affairs, and tourism and marketing, she said.

She came on board VCIA with an understanding of captives and their importance to the state because one of her responsibilities with the department of economic development was to market the state as a captive domicile, she explained.

Since the state's passage of captive legislation, “the increase in licensing has been extraordinary,” she said. “Now in 2002, $5 billion in premiums run through Vermont and $12 million in premium taxes go to Vermont's general fund.”

As important as all this is to the state, she continued, “from my position as secretary of commerce in community development, just as important were 1,000 good paying jobs for Vermonters. That's a very big number in the state of Vermont.”

VCIA, with a significant rise in membership–from 270 members a few months ago to 320–reflects the captive domicile's growth. This is “another indication of the vitality of this industry,” she noted.

During the coming year, she said, the association has two main goals. One is a focus on education.

“It is critically important that captive industry participants remain very well informed” about changing laws, evolving uses for captives, and new industry trends. “Education at all levels is going to be a key part of VCIA's activities,” Ms. Lambert said.

The VCIA conference format includes both basic seminars and accelerated courses. The education component will mirror this effort, she said.

The other emphasis, she said, is legislation at both the state and federal levels. One focus, she said, is the effort to expand the federal Liability Risk Retention Act of 1986, which would allow risk retention groups to expand the types of insurance they could write, excluding workers' compensation.

Ms. Lambert said that while the association is “monitoring the discussion at the federal level,” VCIA is also “working with its partners in Vermont's state government on some possible updates to the captive statute.”

One thing Vermont has done “very well, which has kept it at the head of the game in terms of domestic domiciles, is they have constantly reviewed and revised captive statues,” she explained.

This has been possible because of the “great receptivity on the side of state government regulators to constantly revise and improve Vermont's captive statutes, to stay ahead of the curve.”

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 12, 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.