DFR presents Vermont’s captive insurance program: nearly 700 captives, $33 billion in premiums reported for state-domiciled business

Acting Commissioner Sandy Bighlestone told the House Commerce & Economic Development Committee that Vermont’s captive insurance program licenses nearly 700 captives and that Vermont–domiciled captives reported roughly $33 billion in premiums written last year.

"A captive is essentially a private insurance company with a limited purpose, which is to insure its owner or owners," Bighlestone said, describing captives as tailored risk‑management tools that can be specialized to a firm’s needs.

Bighlestone reviewed the industry’s growth and its role in Vermont’s economy: the captive sector generated about $31,000,000 in premium taxes and supports more than 400 direct jobs through roughly 21 captive management firms operating in the state. She said Vermont licensed nearly 700 captive insurance companies and, in 2023, rose to the number‑one worldwide captive insurance domicile.

The captive insurance division focuses on licensing, financial analysis, quarterly and annual filings, and statutory examinations conducted on a five‑year or sooner cycle as needed. Bighlestone noted DFR uses consulting actuaries because the division does not have an actuary on staff, and that most of the division’s 32 staff are financial analysts and examiners. She emphasized solvency and compliance priorities and described the division’s regulatory approach as derived from National Association of Insurance Commissioners standards but tailored for captive business.

Committee members asked how natural disasters affect captives. Bighlestone said captives can address coverage gaps—particularly in property lines—but must be backed by feasible funding and governance: "Captives aren't a solution for everything. It has to make sense and it has to be feasible. There's a cost to running a captive. Feasibility analysis is first and foremost." DFR said it interviews captive board members during examinations to assess governance and monitors parent company capacity to recapitalize captives if needed.

Bighlestone described collaboration with the Agency of Commerce and Community Development and the Vermont Captive Insurance Association: promotion and recruitment are handled by the Agency’s economic development staff and industry association, while DFR focuses on gatekeeping and regulation.

DFR indicated it will return for a deeper captive briefing later this month.