Summer Conference Registration Opens!

Meticulously planning, securing keynotes and hammering out the schedule, we’ve waited all year for this and now the “gates are opened” for our first in-person conference in three years. We can’t wait to gather with the captive industry’s best and brightest this August in Burlington.

Our 2022 Conference is sure to be a memorable one!

We’re officially launched! Please visit our conference registration page to sign up for the biggest and strongest captive insurance event this summer on the global calendar. No matter your experience level, you will find so much in our conference that will develop you professionally and advance your career. We have a full slate of dynamic educational sessions, curated networking and benchmarking events, and an environment conducive for making business deals. Simply put, you are sure to add to you captive knowledge at the 2022 VCIA Conference, and more than that, it will be a triumphant celebration of the captive industry at large. Be sure to follow the #VCIA2022 hashtag on Twitter and LinkedIn.

I should mention (before I enlist you in another conference prize opportunity!) that I highly recommend booking your hotel and travel flight plans as soon as possible in order to avoid any complications. There are rooms still available at the VCIA group rate, but they are going fast, so head to our conference lodging page and be directed to local hotels who carry our group rate.

I’m a horse racing fan and I enjoy placing some modest bets down when I’m at the track. In that spirit, we are expecting a banner year, and as insurance professionals you are all concerned with risk and the odds that something might or might not occur. So, I introduce you to the VCIA version of ‘How Many Jelly Beans are in the Jar?’  I believe that our total attendance count will be 1,048. Are you taking that over or under? My guess includes exhibitors, staff and all classifications of attendees – i.e. anyone with a name badge! Let me know your number, and if I’m the closest, I will make a $50 personal donation to ICCIE (www.iccie.org), the captive insurance industry’s educational non-profit.  If someone beats me, I will make a $100 donation in their name!  We will, of course, also recognize the best prognosticator! Send your guesses to kmead@vcia.com

Need a little help to formulate your guess? Check out our Conference Attendee page to see who has already registered!

How many people will be in attendance at our conference? Take a guess and email Kevin!

See you in August – if not before! 

Productive RISKWORLD RIMS Conference Concludes

My first RIMS Conference is in the bag. What an impressive production the Risk Management Society had. Indeed it felt like “the center of the Risk Management universe” as they say. The experience has further fueled my desire to make VCIA’s August 8th-11th annual conference the best yet!

From a Vermont captive perspective, our trip to San Francisco was very successful. There was a steady stream of captive owners on day one with potential new captives and service providers visiting us. Our travel-sized maple syrup swag and the ice cream rolling in at 10:30 may lured in some hungry prospects, because surely nothing beats ice cream with maple syrup drizzled on top.

Vermont representing strong at RIMS 2022

Even on the final day three the volume of traffic may have slowed, but the quality interactions continued. I still work as a captive student, absorbing as much information as I can about the industry and regulatory processes. I’ve also thoroughly enjoyed building out my professional network with so many interesting people. All in all Team Vermont held many solid and productive meetings which generated innovative ideas on how we can help captives thrive in the Green Mountain State.

Shoutout to the State of Vermont’s Captive Insurance Economic Development Director Brittany Nevins who does a terrific job of demonstrating why Vermont’s captive insurance industry is the gold standard for an onshore captive insurance domicile. 

All in all Team Vermont held many solid and productive meetings which generated innovative ideas on how we can help captives thrive in the Green Mountain State.

One interesting aspect was the interest from Latin America – A good harbinger for our planned 2023 Roadshow in Mexico City. Stay tuned for more interesting programs as we continue to develop them!

Captive Madness

NCAA Forms a Captive— in Vermont!

Many Vermonters in the captive industry might have had an NCAA bracket that had UVM going all the way. Locals supporting locals is what we do here. Sadly, Arkansas stood in their way, and UVM came up a little short in the first round. They didn’t bust the nation’s brackets, but there were other perpetrators—I’m looking at you, Saint Peters Peacocks. The absence of the Catamounts from the Final Four makes it no less intriguing, but you might wonder, where’s the link with VCIA and captive insurance?

The Vermont Captive Insurance Industry is a Powerhouse Program

The answer lies in the fact that the NCAA, perhaps mindful of the hit that their marquee event took in 2020 and 2021, recently formed a captive, and not only that, but they have made its domicile in the Green Mountain State. Vermont’s most popular (and free) newspaper, Seven Days reports that the captive activated at the start of March and could “potentially save the association millions of dollars.” Taking on both D & O and event cancellation coverage, the entity has been funded with $175M, and will be consolidated into the financial statements of the NCAA.

The pandemic has raised the profile of Vermont’s captive insurance industry as more businesses have sought to self-insure, according to state officials.

ANNE WALLACE ALLEN, Seven Days

While the University of Vermont will not be crowned winners after this upcoming Monday’s championship, the State of Vermont surely won an impactful and lasting relationship with the National Collegiate Athletic Association. VCIA is happy to announce that their captive formation has joined our association on a free, first year trial basis.

My prediction for the Final Four winner (which is the sporting equivalent of a kiss of death)? Kansas Jayhawks. Who do you have?

The Results Are In

You all saw it coming. The number of captives licensed in Vermont last year eclipsed 2020 – already a banner year. Sure, almost every captive domicile had a good year, but even with over 40 states establishing captive laws, Vermont stands head and shoulders above.

Here are the hard numbers: Forty-five new captive insurance companies were licensed this past year in Vermont, making 2021 Vermont’s 4th highest year of growth in its 40-year history. Vermont is now home to 620 licensed captives, consisting of 589 active and 31 dormant captives. Vermont’s 52 sponsored cell captives currently host nearly 500 cells and separate accounts, in addition to the licensed captive companies.

The new captives were licensed in 17 different industries, the main industries being healthcare, real estate, manufacturing, insurance, and transportation. At least 5 of Vermont’s new captives in 2021 were formed by companies with international roots, including Japan, Germany, Russia, the United Kingdom, and Australia. Vermont has been experiencing growth in the number of new cells within sponsored captives, at a similar pace as new company licenses, with nine of the 45 new companies formed this year being sponsored cell companies.

Vermont has licensed a total of 1,242 captive insurance companies since 1981 and remains, by far, the largest U.S. domicile for captive insurance and third largest in the world. With an active pipeline of prospective new captive insurance companies already underway for 2022, the state expects continued growth in the coming year.

Thank you and I look forward to hearing from you.

Rich Smith
VCIA President

Happy Holidays!

As we close out the year it is a great time to reflect on the last 12 months – or longer. It certainly has been a challenging year for all of us, but I can say without reservation how grateful I am to have been a part of this great industry for the past 12 years.

The friends I have made as head of VCIA are amazing. All of you have made my job joyful which is not something everyone can say, I know. You all know how fabulous the folks who work in the captive insurance space at the State of Vermont are – truly a pleasure to work with Dave Provost, Sandy Bigglestone, Dan Petterson, Christine Brown, Becky Aitchison, and Brittany Nevins.

VCIA’s Board of Directors day in and day out have provided their time, energy, guidance, and friendship through a year where they had to face many challenging decisions. My thanks to Andrew Baillie, Donna Blair, Joe Carter, Lawrence Cook, Tracy Hassett, Stephanie Mapes, Gail Newman, Jason Palmer, Dennis Silvia, Anne Marie Towle, and Derick White.

And to work with the great staff at VCIA in these tumultuous times has shown me just how wonderful they all are. Thank you so much Diane Leach, Elizabeth Halpern (who leaves us at the end of the year – sniff), Peggy Companion, Janice Valgoi, Dave Rapuano, and Meg Precourt for everything!

Even in these uncertain times, we are looking for a brighter future with 2022 and it gives me such comfort to know what good people there are out there.

Happy Holidays!

Rich Smith,
VCIA President

Hail to 40 Years!

Vermont’s 40th anniversary year of the inception of its captive industry is drawing to a close. Since 1981, Vermont has worked hard to be the top U.S. domicile and continues to strive for excellence. Currently, VCIA is working with Dave Provost and Sandy Bigglestone and their team at DFR to build another captive bill to be introduced into Vermont’s General Assembly.

Over the past two years of COVID challenges, the Gold Standard has never been so apropos as Vermont lead the captive insurance industry in incredible growth and resiliency. I could not be prouder to be a part of this great work.

Brittany Nevins, in her role as Captive Insurance Economic Development Director, has put together a terrific short film highlighting relationships, accomplishments, future goals—and really what it means to be part of the Vermont captive family. I hope you will watch and encourage you to share.

Stay well and see you soon!

Rich Smith,
VCIA President

Back to the Future… with VCIA’s Annual Tax Update!

I hope you all had a wonderful Thanksgiving last week and were able to spend it with friends and family. As we move into the continued uncertainty with COVID, it is always good to take a step back to appreciate and be with loved ones (or ones that at least like you).

One certain thing you can count on this time of year is VCIA’s annual captive tax update webinar, scheduled for December 15 at 2:00 ET. This year we present “Back to the Future” where our esteemed captive tax specialists review 2021’s most significant tax developments and explore the possible impacts of proposed legislative action by the current administration.

Our panel consists of Daniel Kusaila, Partner at Crowe LLP, Chaz Lavelle, Partner at Dentons Bingham Greenbaum LLP, and Brandy Vannoy, Partner at Johnson Lambert LLP. With the help from content advisors Stephanie Brassard of Johnson Lambert LLP and Dana Marino of Innovative Captive Strategies, the panel will provide an analysis of state and federal tax activity from 2021.

Our panelists will also provide an overview of recent, notable court cases and IRS actions. This includes a discussion on “lessons learned “ for large captives from small captive cases and a “fact or factors” segment highlighting key drivers that impacted the decisions made by the courts.

Our tax specialists will be monitoring the current tax landscape through the days leading up to this webinar to ensure the audience receives real-time updates on the state and federal tax environments.

Also, I want to say congratulations to Dave Angus, recently appointed as counsel to the captive insurance law practice at the firm of Paul Frank + Collins in Burlington, Vermont. Dave brings his captive insurance and transactional practice from The Angus Firm to PF+C’s captive insurance team and has been a long-time member (and twice chair) of VCIA’s Legislative Committee. Congratulations, David!

Stay well and see you soon!

Rich Smith,
VCIA President

COP 26

As the world’s leaders conclude their two-week summit in Scotland it is good to see some of the leadership in the insurance industry involved in the most critical issue facing all of us today. Many in the insurance industry are working positively to promote policies that will help mitigate climate change – or at least don’t add to the problem – such as new ESG guidelines for the company, looking at the impact of placing climate risks in their portfolios, new modeling, and reassessing where to invest the huge assets the insurance industry has under management. Reinsurers rank climate change as the top risk facing the global insurance industry, according to PwC’s latest survey.

Climate policy is a risk management system, and the industry needs to provide a comprehensive vision for risk sharing going forward. There are many complex issues to be worked out for both the insurers and their insured for sure, however, a cleared-eyed approach by all parties can get us there.

Innovations like from AXA XL which has launched a tool that maps current and future flood hazards resulting from climate change and integrates the protective benefits of coastal ecosystems into insurance risk models, is a great example of where the industry can lead.

There is a theory in the risk management world, however, that insurance can be seen as a barrier to the kind of innovation needed to tackle the hard nut that is climate change. Providing P&C insurance, or D&O insurance, to a client without concern for the long-term impacts climate change can bring can remove the responsibility from the clients. Adding to this, innovative changes to infrastructure, along with the recent technologies used to build resilience, can be hard to insure as they rarely have claims history. This makes it difficult for the insurance sector to price the risk.

I think the basic principle behind captive insurance will accelerate solutions. With captives, organizations take direct responsibility for their risks – they now own it. The data on how to mitigate climate risk comes from their captive which allows them to be more focused on pursuing resilience at all levels. No longer is there a large, anonymous insurance company obscuring leaders from understanding and acting to better protect their own properties, employees, supply chains, and ultimately shareholders. And captives are innovative. They have the ability to take specific risks for an organization that might be looking at pioneering ways to use new technologies to protect from the impacts of climate change.

I remain hopeful that with a comprehensive and coordinated effort from all facets of society and industry we can turn the corner on climate change. Captive insurance will be part of that solution.

Stay well and see you soon!

Rich Smith,
VCIA President

The People of Washington Have Spoken!

Captive Review reported that Washington State voters rejected a recent law that imposes premium taxes on captive insurance companies licensed in other states that are doing business in Washington State this past Tuesday! When asked to give their views on introducing the 2% premium tax, voters opposed it by a 19 point margin. It was just one of a number of new taxes rejected by voters under the advisory votes on tax increases that must be held under state law.

As you all have heard me say in an earlier post, the Washington State captive law passed earlier this year sets a terrible precedent whereby acquiescing some regulatory oversight by the Washington State insurance commissioner on captives domiciled in other states. Under the legislation, S.B. 5315, captives licensed elsewhere and operating in Washington would be required to pay an initial registration fee of $2,500 and be assessed an annual two percent premium tax on insurance provided to their parents or affiliates for Washington risks.

The reality is that the non-binding vote is unlikely to have an impact – the law will remain in effect unless state legislators vote to repeal the measure, which is unlikely to happen. I don’t think Washington State citizens delved into the issue of the captive tax and, after weighing the strong evidence of its inappropriateness, decided to reject it. No, this was a broad anti-tax vote on several taxation measures in the state, and the captive tax was dumped into a bunch of other unpopular taxes.

That being said, the vote did give me a moment of hope!

Stay well and see you soon!

Rich Smith,
VCIA President

Member Mixer

Thank you to all our members who joined us this past Wednesday evening for VCIA’s open board meeting, DFR Q & A, and Mixer. It was so nice to see people gathering once again, even if somewhat cautiously, for VCIA’s first in-person event since the beginning of COVID.

Besides hearing the litany on how many legislative items we are watching down in DC that will likely not move this Congress due to the continued gridlock, members got to hear Dave Provost and Dan Petterson from Vermont’s Department of Financial Regulation provide an update on their work and changes in the future that they will see.  Brittany Nevins , Vermont’s Director of Captive Marketing, screened a new video she produced extolling the virtues as Vermont as a captive domicile for members. It was a terrific piece that will be used in the State’s marketing efforts going forward. One of the “stars” of the video was VCIA new board member, Joe Carter, from United Educators, who did a super job outlining what makes Vermont so special for captive owners.

Dave provided an update on the number of captives being licensed this year and it sounds like its going to be a record breaker. Over 40 have been approved to date and we usually see a wave of applications toward the end of the year as organizations scramble to get their captives licensed. That said, we could easily hit 50 new captives this year. A good year for new captives licensed in Vermont is usually around 25. Another interesting note, DFR is seeing far fewer dissolutions and redomestications out of Vermont then normal, meaning that current captives are not only happy but thriving. Dan reported that DFR was fully staffed and ready to take on the workload that these new captives promise.

The reception was a terrific way to cap off the day with an opportunity to see and say “hi” to many of our old and new friends alike. A special shoutout to former board member, and good friend, Ed Koral who traveled all the way from New York City to joins us that evening. I think the prize for the greatest distance traveled for the event was by Andrew Zoller, the new Head of International & Captive Solutions – US Commercial Insurance for Zurich North America, who flew in from Dallas.  Welcome to the family, Andrew!

Rich Smith,
VCIA President

Stay well and see you soon!