U.S. captive domiciles are healthy and growing, but it wasn’t always this way.
Dateline Bermuda, 1950s. Fred Reiss, a creative insurance agent from Youngstown, Ohio, develops a superior alternative to traditional insurance for his client by establishing a “captive” insurance company under the insurance laws and regulations of Bermuda. This alternative risk-financing method quickly catches on.
Within a decade there are hundreds of captives. Bermuda, followed by the Cayman Islands, the Channel Islands and other offshore domiciles, learn that captives are good for their local economies and compete vigorously with each other to attract captive business. Meanwhile, infrastructures grow. Captive management becomes a new business and accounting, actuarial and law firms develop expertise in captives.
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