Defender has more than 3,000 employees, operates in 21 states, and has many Fortune 500 companies as clients, the department said. Defender's captive subsidiary will provide the company with insurance for workers' compensation and general liability.

"Our success on the captive insurance front shows exactly what we can do in this state if we make something a priority from an economic development standpoint," South Carolina Governor Mark Sanford said in a statement. "This is a segment of the economy where we're now tremendously competitive as a state.

He noted that the key for his administration moving forward will be "expanding that competitive advantage throughout our state's economy, particularly with respect to the thousands of small businesses out there that form the backbone of job creation here in South Carolina."

Hollis Cone, chief executive officer of Defender, said the captive route was chosen because "it gave the flexibility and control we needed. It also allowed us to fully reap the benefits of the priority our company places on safety and loss prevention."

He added that Defender chose South Carolina because of geographic advantages. "South Carolina has the regulatory attitude and professional skills infrastructure that made this venture run flawlessly," he said.

Starting with two captive insurers in 2000, the state added 9 in 2001, 17 in 2002, 39 in 2003 and 33, so far, in 2004, the department said.