Others are offering Webcasts and other promotional and marketing strategies to give insurance buyers access to top regulators.

Some have been successful, if based on the numbers. Most successful is Vermont, which has stepped-up its outreach in recent years. Hawaii, South Carolina, Washington, D.C. and Arizona also are taking steps to increase their captive count.

But in this day of New York Attorney General Eliot Spitzer's probes, Sarbanes-Oxley governance regulations, regulatory overhaul, reinsurance collateral issues and other hurdles to managing a captive, why would any prudent owner or board seriously consider packing their offshore corporate bags to move somewhere else, like the United States?

After 50 years of captives--yes, they've been around that long--most businessowners, large and small, are over the mystery of captives. They increasingly use them to control costs, preserve assets and manage risk, making ease and convenience of travel a major consideration.

In addition, while improvements in business communications have dramatically decreased the need for travel, there are compelling reasons to keep in touch with domicile regulators.

The rise of middle-market commercial businesses such as transportation and health care providers using captives--particularly protected-cell captives--now largely located offshore in various forms, is forcing many regulators to update their captive statutes to encourage formation of similarly constructed cell captives in the United States.

Fueled by increasingly sophisticated insurance buyers as well as frustrated middle-market businesses seeking the benefits of a captive, such captive cells now number more than 1,000.

While much of cell captive growth is benefiting offshore domiciles--partly because of the experience of regulators in managing these new captives, and partly because the protected-cell captive concept got its start in Guernsey in 1997--several new sponsored captives have been formed in the United States, notably by large insurers that also have a cell captive offshore.

Although there are many reasons for a captive to redomicile--either offshore to onshore, or to another domicile within the United States--there are also many reasons not to.

One of them is switching costs--incurred when a captive changes from one domicile to another. They often cannot be measured in dollars and cents, such as relocating files and data, or breaking an agreement that results in additional fees.

They also can include hidden costs, such as relationships lost in transition. Another example is a certain tax strategy that might be lost if the captive redomiciles to the United States.

In fact, specific "redomestication" guidelines or provisions are increasingly being added to existing captive statutes, to help ease the burden of relocating an offshore captive to the United States.

All of this activity has not been lost on offshore domiciles. They are seeing the results of a softening insurance market added to aggressive marketing by some U.S. domiciles.

In the end, this is good news for captive owners and policyholders, because as competition increases for captive dollars, frictional costs go down--leaving more premium dollars available to pay claims.