(Host) The world’s largest annual captive insurance industry conference gets underway in Burlington this week. Vermont is one of the leading global markets for captive insurance: a way for companies to self insure against predictable risks.
Rich Smith is President of the Vermont Captive Insurance Association. He says Vermont is a great place to do business:
(Smith) "What you see perhaps in other domiciles, in other states that try to do this, there’s an interest for it for maybe 2, 3, maybe even 5 years. And then, depending on if there’s a new governor, maybe a different legislature, that interest starts to wane. For the past 30 years, this state has shown that it is committed to this industry. There’s never been a governor or a legislature that hasn’t been supportive.
(Host) David Provost is the Deputy Commissioner of the Captive Insurance Division at BISCHA, the Vermont Department of Banking, Insurance, Securities & Health Care Administration. He says the state gets a lot out of captives, including 25 million dollars in annual taxes, and about 1400 jobs. But he says the state is very strict about regulation.
(Provost) "These companies are treated almost exactly the same way we treat a traditional insurance company. They’re audited by independent auditors. They have to file annual reports with the state. We have our own crew of examiners who go out and do a triennial exam of the company. So we know exactly what’s going on with these guys and it’s a seriously regulated industry and that’s actually what they want."
(Host) There are about 580 captive insurance companies currently operating in the state.