One thousand captive insurance companies are now based in Vermont.
The companies are established by large parent corporations or groups to insure their risks and although their Vermont place of business is just a mailing address, state officials say they are an important part of the economy.
The newest captive insurance firm is Cassat Insurance Group, which represents nine non-profit hospitals.
At a ceremony marking the milestone Department of Financial Regulation Commissioner Susan Donegan said the companies provide Vermont with tax revenue and they create jobs indirectly.
“It’s not that there’s bricks and mortar and people here, but what there are are auxiliary services, the financial services support that these companies need; accountants, captive management companies – those types of very good jobs, well paying, that are here in Vermont,” Donegan explained.
Donegan says Vermont is number one in the nation and third in the world as a domicile for captive insurance companies.
She says other states entering the market are far behind Vermont.
“We don’t see them as competitors because we’re fairly far out ahead of them, she said. “ The other thing is you have to really be willing to invest resources to do it right. We have forty people that do nothing but captive insurance examinations. Some states have a couple, or three or four, so they’re going to have to sink some resources in order to be competitive.”
Vermont created its first captive insurance regulations in 1981 in order to attract the companies.
Governor Peter Shumlin says since then the state has generated $350 million in taxes and fees paid by captive insurance companies.
