Connecticut’s incoming administration has an opportunity to jump-start a new industry, the captive insurance industry, which could provide additional risk management options to businesses and generate substantial employment with significant tax revenue for the state, without use of general revenue funds.
Captive insurance companies are insurance companies established with the objective of insuring risks generated by their parent entity or entities, or of the parent’s customers.
To date, more than 5,000 captives have been established. Vermont currently is the third largest domicile in the world, following Bermuda and the Cayman Islands. Other states with substantial numbers of domiciled captives include South Carolina, New York, Hawaii, Arizona, Montana, and Nevada.