Vermont Announced Its 1000th Captive
Whether or not you agree with his politics, the Principals at CIC Services, LLC would like to encourage you to raise your glass (the next time you are at dinner) and toast former Vermont Governor and Democratic Party Chairman, Howard Dean. In the 1990’s when Howard Dean was Governor of Vermont, he learned about captive insurance companies and decided captives could be a revenue source for the state of Vermont. After all, Vermont was one of the least populated states in the US, and the economy needed a boost. So, Governor Dean put Vermont on the map as a player in the captive insurance industry, and he did so by undercutting the costs (both formation and capital requirements) to establish a captive insurance company in New York. His vision and action made captive insurance company ownership more accessible and more affordable.
Clearly, his vision has become a reality and Vermont continues to enjoy the fruits of Governor Dean’s labors. The State of Vermont Department of Financial Regulation (DFR) announced that it has licensed the state’s 1,000th captive insurance company. The “lucky” CIC is the Cassatt Insurance Group, a collection of nine independent, nonprofit hospitals in southeastern Pennsylvania. Cassatt provides medical liability coverage for 1,200 physicians.
For decades, the numerous risk management and financial benefits of captive ownership were out of reach for small and mid-size businesses. Howard Dean’s direct competition with New York state resulted in Vermont’s ascension to “Captive Hub” and caused other states and small countries to scramble to establish their own captive insurance statutes and open for business. Competition among captive domiciles has driven down formation costs and initial capital requirements, making it a reality for mid-size, small and even closely-held businesses to form their own REAL insurance companies.
Three cheers for Howard Dean.