While some of the hold-ups are due to captive regulators requiring more information, Mr. Osborne said "it's the banks; it's the insurance companies; it's the reinsurers. All of those processes are adding time."

A potential captive owner may be set up with a letter of credit from a certain bank, for example, but the insurer may say, "We can't take [that bank]. We have no problem with the bank, but we've reached our capacity with that bank," according to Mr. Osborne. "So this is a whole new thing we've never seen before. Carriers are saying they put a capacity limit on banks."

Another result of the financial crisis is that some domiciles have seen their captive regulatory departments cut. "In many departments, [captives] is not necessarily their only job," Mr. Osborne said, "and quite a few of the captive divisions have been watered down and have other responsibilities."

Because some captive departments have been gutted, the process of choosing a domicile has changed as well.

Captive managers once eager to work with new domiciles are now eyeing the established, more stabile domiciles with renewed interest.

Vermont and Hawaii, two of the largest and oldest U.S. domiciles, have become even more popular.

"Now it's not so much speed to market as knowing that you have the expertise and regulatory authority and stability that should ensure the process will go as expected," Mr. Osborne said.

He added that his firm is up-front with those forming captives, telling them about the lengthy process. This has not kept people from forming captives, however. "If they've made the commitment, a lot of them are willing to stick with the process," he said.

Mr. Osborne emphasized that the current situation is not the fault of any one aspect of a captive formation but rather is "a combination of the whole world's situation, where three or four different processes have been slowed down."

He said he doesn't see the situation letting up, however, until the economy turns around, "or until financial regulation reform comes through and deals with systemic failure."

The fear for carriers, he said, is that if a large bank goes under, that carrier could be left with a large exposure.

He speculated that eventually, "somebody is going to break ranks and get a little easier, and that's when we might see a break in this." Meanwhile, he observed, "I don't see it changing until we've got more clarity with the financial situation. The banks, the carriers, people are a little skittish."