Vermont announced that the state has licensed its 800th captive insurer for that domicile.
The newest arrival is a medical malpractice insurer. Vermont Deputy Insurance Commissioner Len Crouse said medical captives were a major trend a few years back, but the state is being used as a captive domicile now for a variety of coverages, including property, real estate and energy.
In addition, Mr. Crouse noted during an interview yesterday that new legislation allowing securitization in a captive–called Triple-X captives, used to finance life insurance reserves–was expected to win final passage in the legislature and get the signature of Gov. Jim Douglas.
The legislation would create a separate section in the statute for securitization and make the process easier to understand and maneuver, he said.
Vermont's 800th captive is the Mount Kisco Medical Group, one of New York State's largest medical groups, according to the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA).
Mount Kisco Medical Group was founded in 1946 and is the oldest multispecialty physician group in New York and the largest in Westchester County.
“We examined both off-shore and on-shore options for a few years before choosing Vermont to domicile our RRG [risk retention group],” said Dr. Scott D. Hayworth, Mount Kisco Medical Group president and chief executive officer and president of Bedford Physicians RRG Inc. “Vermont's long, successful history in the captive business combined with the outstanding regulatory team led to our decision.”
Mr. Hayworth said that the key factor in the selection of a captive domicile “was the dedication the state had to the success of the captive industry.”
Vermont currently has nearly 100 captives writing medical malpractice coverage with approximately $1.6 billion in gross written premium last year.
“More and more physician groups are choosing Vermont for their medical malpractice captives,” said Dan Towle, financial services director for the Vermont Department of Economic Development.
Vermont began licensing captive insurance companies in 1981. “I am proud of what we have accomplished and the quality of the companies we have licensed in Vermont. This is a great business for our state and we can all take some pride in this accomplishment,” Mr. Crouse said.
Vermont began 2007 with 791 licensees, and Mr. Crouse predicts the state will add 30-35 more captives before the year ends.
“This benchmark gives Vermonters a strong sense of pride and achievement that our commitment to this industry for over twenty-five years has been heard loud and clear,” Gov. Douglas said.
Vermont is the largest captive insurance domicile in the U.S. and second largest in the world in terms of gross written premium, with $11.55 billion in 2006. Vermont is also home to 42 of the companies that make up the Fortune 100. Nineteen of the companies that make up the Dow 30 have Vermont captives as well, according to BISHCA.
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