Vermont, which has been a captive domicile since 1981, previously allowed other types of captive insurers, including pure captives, association captives
and industrial Insured captives, as well as risk retention groups.
passed early legislation to allow association captives
because of the large number of such organizations located there, not many are being formed because of startup costs and requirements that all members be eligible to participate, regardless of their risk profile.
These include "pure captives," where the insurance company insures the risks of one group of related entities; "association captives
," where the captive insurance company covers the risks of the members of a particular association; and "agency captives," where the captive is owned and operated by one or more insurance agents to insure the risks of their clients.
These include association captives
formed and owned by members of an industry or trade association to share the risks of the group and segregated cell captives and risk-retention groups, which allow members that engage in similar or related businesses to pool only their liability insurance.
Tennessee's original captive law allowed companies to set up pure captives, trade association captives
, industrial insured captives and risk-retention groups.
. Generally used for a group of homogeneous businesses, with a trade association owner, this CAPTIVE is usually formed to stabilize insurance costs for association members.
The law creates five classes of authority that include pure and association captives
, two property-casualty classes, and an unrestricted life and disability class.
Many companies are interested in alternative vehicles and instead opt to self-insure as part of a group by forming association captives
or risk retention groups.
"We've also seen increased growth from group association captives
out of the U.S., so I'd say very positive signs overall.
The new law also created a special purpose captive licensing category and lowered the minimum capitalization requirement for association captives
from $750,000 to $500,000.
"We have also proposed lowering the minimum capital requirements for association captives
, and finally we have proposed a variety of technical amendments to update various components of our law.
(In 2011, the Montana Legislature lowered the minimum capitalization requirement for association captives
from $750,000 to $500,000.)