Vermont Business Magazine In this A.M.BestTV episode, which wraps up the third day of the annual Vermont Captive Insurance Association (VCIA) conference, captive regulators from South Carolina, Vermont and Tennessee review captive oversight, including a strategy that has some domiciles offering tax breaks to captives that re-domesticate. Vermont is the nation's largest domicile for captives and would have the most to lose if this strategy proves successful. Vermont also just hosted the industry's premier conference, which concluded last week in Burlington. Tennesse has been successful using this strategy, but South Carolina warned about this "unwelcome development" that arm-twists a large company to move its captive to a state without substantial regulation. David Provost, deputy commissioner, Vermont Captive Insurance Division, said a few companies have left the state to return to the parent company's home state. He does not think this is a major problem for Vermont.
Click on on image below to watch the report on re-domestication. The second video is a conference overview.
“There is a lot of competition among domiciles, and re-domestication is a very cohesive way to go about it,” said Jay Branum, director, captive insurance, South Carolina. “This re-domestication is sort of a blunt instrument, which is market-disrupting and interferes with the free choice of a captive to maximize its self-interest.”
Branum also said he believes that the self-procurement tax should not be the dominate factor for captive owners to choose where they want to domicile their captives. Owners, he said, should be able to capitalize their companies and structure their programs based on what is best for them.
Other people that appear in this episode:
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David Provost, deputy commissioner, Vermont Captive Insurance Division; and
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Michael Corbett, director, captive insurance, Tennessee.
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Starting a Captive Takes Months of Preparation: At the second day of the VCIA conference, experts in forming a captive said they start by determining if that type of insurance organization makes sense. Risk needs, taxation, regulatory requirements and location come next, they said: http://www.ambest.com/v.asp?v=vcia2816nc.
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Captive Insurers Challenged by Soft Market, Increased Scrutiny: At the first day of the VCIA conference, insurance executives said captive owners are faced with increasing competition from reinsurers and insurers willing to cut prices, along with extra scrutiny as regulators look more closely at business models and tax exposures: http://www.ambest.com/v.asp?v=vcia1816nc.
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OLDWICK, N.J.--(BUSINESS WIRE)--August 12, 2016 Copyright © 2016 by A.M. Best Company, Inc.