November 5, 2009 by Canadian Underwriter
Bermuda and the Cayman Islands are still the top two places to domicile insurance captives, but the United States is supplying some stiff competition — to the point where some say Bermuda is losing its status as a growth centre for captives.
In an article, “Competing Domiciles Dial Up Heat,” U.S./Canada BestWeek on Nov. 2 observes that U.S. companies are now trending towards establishing onshore domiciles, as opposed to setting up offshore captives.
About 30 U.S. states have captive laws on their books, giving companies a great deal of choice when looking for a suitable domicile, the report says.
“After Sarbanes-Oxley and Enron, a lot of U.S. corporations started questioning the reasons for having offshore captive domiciles,” Nancy Gray, regional director of the Americas for Aon Insurance Managers, is quoted as saying in A.M. Best’s report. “It’s much easier, more politically correct, to be located in an onshore, domestic domicile.
“Bermuda tends to be losing more than they are gaining at this point. We don’t see Bermuda as being a growth centre.”
Vermont, Hawaii, Arizona, Utah and South Carolina (a relative newcomer to the game) are all listed as increasingly popular U.S. domiciles. Established U.S. domiciles include Texas (470 companies), New York (351) and Illinois (328).
As for popular global domiciles, in a list that does include Bermuda or Cayman Islands, the United States appears at the top of the list with 3,876 domiciled companies. Canada appears ninth on the list, with 267 captives.