Counting captives has been more of an “art” than science since the beginnings of the industry. The industry standard, if one can call it that, has been to count the number of licenses a particular domicile has issued over the years, and not so much as the number of captives currently active. For instance, Vermont has licensed over a thousand captives, but has just under 600 active captives currently. We all usually acknowledge this system as we compare ourselves with each other. Fair enough. So I was a little surprised to see Delaware announcing that they have licensed their 1000 captive this year. I don’t usually want to immerse myself in the business of other domiciles, but I had to ask what the hell is Delaware counting?

In press statements, Delaware reports that in 2009 they were home to only 38 captive insurance companies.  So presumably over the past six years they effectively added 962 captives – a mind blowing increase of 2500% if I did my math correctly. Really?

Since none of the reports explain how Delaware got to their 1000 number, I hate to hazard a guess on what they counted. Having watched a couple of the Presidential debates lately, I am beginning to worry that it’s too easy to throw “data” out there and then blame those that question it. It’s a little like Russian President Putin saying “we have no troops in Crimea” – OK maybe I am a little off the rails here. Perhaps it’s time for a call for sanity in the numbers game. I don’t expect we need an “official scorekeeper” but maybe just a little common sense.

Don’t forget to register for our next webinar on December 16. Captive Taxation: Trends and New Developments Webinar will include captive stars Tom Jones, Partner at McDermott Will & Emery, Chaz Lavelle, Partner at Bingham Greenebaum Doll, Dan Kusaila, Tax Partner at Crowe Horwath, and Art Koritzinsky, Managing Director at Marsh USA. Go to www.vcia.com to register today!

Thank you all very much, and I look forward to hearing from you.

Rich Smith
VCIA President