Vermont captive insurance leaders press Legislature for more regulator resources, workforce and conference capacity

Kevin Meade, chief executive officer of the Vermont Captive Insurance Association, told the Vermont Senate Finance Committee on Jan. 22 that captive insurance — insurance companies owned by their policyholders to retain and finance risk — plays a large role in commercial insurance and that Vermont must invest to remain competitive.

“Risk obviously comes with a cost… The only way of avoiding risk is to do nothing,” Meade said, describing captives as regulated insurance companies owned by the parent firm that pays premiums to the captive and receives claims payments from it.

Meade told senators that Vermont is the largest global domicile for captives, that nearly 700 captive insurance companies are registered in the state, and that captives are used for a wide array of coverages — from medical malpractice to warranty and parametric weather products. He urged the committee to strengthen resources for the Department of Financial Regulation’s (DFR) captive division so the state’s systems match the industry’s needs and to support workforce-development efforts to address a limited local talent pool.

“ We need you guys to really, strongly commit to resource the DFR, especially the captive division going forwards,” Meade said.

Why it matters: Vermont’s captive industry draws conferences and professional services to the state, generates premiums and pays professional fees to Vermont firms. Witnesses said industry growth creates economic benefits but also depends on the state’s ability to regulate quickly, transparently and with modern systems.

Rhonda Young, vice president of risk management at Alberici Constructors, described why her company domiciled one of its captives in Vermont. Alberici, a St. Louis-based construction company with about $4 billion in revenue and roughly 3,500 employees, uses two captives to write core casualty lines, medical stop-loss and other coverages. Young said the company chose Vermont because of “professionalism, credibility, transparency” and the state’s education and regulator resources.

“After consideration of various domiciles, it was clear that Vermont was the gold standard,” Young said, adding that the captive community and the DFR have been “very responsive, professional, and supportive.” She told the committee her firm’s Vermont captive wrote roughly $25.5 million in premium in 2023 and about $23.7 million in 2024 (figures provided by the witness and described as approximate).

Meade and industry speakers also outlined operational constraints in Burlington that limit the size and convenience of industry conferences, saying the industry’s annual conference brings roughly 1,000 visitors and strains local hotel, event and transit capacity. Meade asked senators to consider funding feasibility studies and other steps to grow Burlington’s meetings, incentives, conventions and expositions (MICE) capacity and to attend the VCIA conference, scheduled for Aug. 11–13, to meet captive owners and service providers.

Industry requests listed to the committee included: increased funding and modern systems for the DFR’s captive insurance division; support for workforce development and talent recruitment; outreach from state economic development partners to help Burlington host larger business events; and continued maintenance of the legislative and regulatory framework that has made Vermont a leading domicile.

Committee business: The committee heard the presentation and scheduled additional agenda items for later in the session. No formal legislative action on the items presented was taken at the Jan. 22 hearing.

The committee’s consideration of regulator resources and event-support funding could affect Vermont’s strategy for retaining captive registrations and the economic activity tied to the industry.