The new ACE Captive Solutions office will utilize the expertise and resources of two ACE business units, ACE Tempest Re USA and ACE Risk Management, according to ACE. Carol Frey, vice president for ACE Captive Solutions, will head the new office.

"This is a new venture for us; it's unproven territory," said Bob Davis, senior vice president, ACE Captive Solutions. "We're really optimistic because the feedback we've received so far from risk managers, and from the state of Vermont and captive managers, has been extremely positive."

He said that a perceived advantage of Bermuda is that "it's considered to be a territory for one-stop shopping" for captive management, reinsurance and fronting.

"Vermont has rightly or wrongly been perceived purely as a captive management location," Mr. Davis told National Underwriter. "We're hoping that is going to change."

To facilitate a change, he said, "if we can provide a resource that gives the captive managers and the owners of captives access to reinsurance facilities through Tempest Re and fronting through the various ACE business units, then we've made the first step toward bringing Vermont to the next stage."

A benefit of the new division, he said, is "our ability to access alternative distribution networks." Historically, he said, ACE Captive Solutions has relied on retail brokers for business, but now "the horizon has broadened to include captive managers, financial institutions, consultants, actuaries and attorneys."

Tempest Re, the reinsurance arm of ACE, can provide reinsurance for single parent and group captive programs, he said, adding that Tempest Re goes across multiple product lines including property, primary casualty, professional liability, marine, general aviation, directors and officers, medical malpractice, surety, and fidelity.

Gov. Douglas said the insurance industry is a "clean industry" and that he would like to see more reinsurers locate to Vermont. "We're thrilled to be such a successful domicile," he said.

He noted that the captive industry provides "1,400 good paying jobs?well above the average wage."

The average salary of a captive insurance industry job in Vermont is $51,569, which is 60 percent higher than the average salary in Vermont, he observed.