Pin It

Captive But Dangerous? 

Vermont's emergence as the main base in the United States for captive insurance entities has been touted as one of the state's great economic-development achievements of the past 30 years. But a report in Tuesday's New York Times raises questions about the wisdom and sustainability of that achievement.

A total of 919 captive insurance operations are now headquartered in Vermont — far more than in any other state. In fact, this mostly Burlington-domiciled sector is the third-largest in the world; only the offshore financial havens of Bermuda and the Cayman Islands have attracted more companies of this kind. Captives, which are subsidiaries formed to provide insurance to their parent companies, account for an estimated 1400 jobs in Vermont, mainly in banks, law offices and accounting firms. And the nearly $24 million in taxes collected from captives' transactions represents about two percent of state revenues.

Many of corporate America's best-known names have established captives in Vermont, starting with B.F. Goodrich in 1981. In addition to pumping hundreds of millions of dollars through Burlington's financial services sector and generating hundreds of high-paying jobs that the recession did not kill off, the captive industry produces no pollution.

This pretty picture has been smudged, however, by the page-one story in the Times' May 9 edition.

Got something to say? Send a letter to the editor and we'll publish your feedback in print!

Tags: ,

Pin It

About The Author

Kevin J. Kelley

Kevin J. Kelley

Kevin J. Kelley is a contributing writer for Seven Days, Vermont Business Magazine and the daily Nation of Kenya.


Subscribe to this thread:

Add a comment

Seven Days moderates comments in order to ensure a civil environment. Please treat the comments section as you would a town meeting, dinner party or classroom discussion. In other words, keep commenting classy! Read our guidelines...

Note: Comments are limited to 300 words.

Recent Comments

Social Club

Like Seven Days contests and events? Join the club!

See an example of this newsletter...

Keep up with us Seven Days a week!

Sign up for our fun and informative

All content © 2016 Da Capo Publishing, Inc. 255 So Champlain St Ste 5, Burlington, VT 05401
Website powered by Foundation