The Vermont Department of Financial Regulation (VDFR) announced that it has licensed 35 new captive insurers during the first half of 2025, maintaining a pace consistent with previous years
For comparison, the state issued 38 licenses in 2023 and 41 in 2024.
According to Jim DeVoe-Talluto (pictured above), assistant director of captive insurance at VDFR, several applications remain under review and could make 2025 one of the state’s strongest years historically for new formations. Vermont continues to lead globally as the largest captive insurance domicile.
“We are continuing to experience strong growth in captive formations,” DeVoe-Talluto said. He noted that the department also tracks net growth, calculated as formations minus dissolutions. Net growth reached 20 in 2023, 24 in 2024, and 28 through June 30 of this year.
DeVoe-Talluto said captive formations may eventually slow if the soft market continues, but he added that formations often trail market shifts. He explained that the impact of a temporary drop in commercial rates may not immediately offset the multi-year trajectory of premium increases that led to a captive’s formation.
“Year-over-year commercial premium increases may not be mitigated by a one-year dip in pricing or increase in availability, and a new captive may still be feasible,” he said.
While the department occasionally sees captive applications withdrawn when market conditions improve, it is more common for parent companies to modify how they use existing captives. This could involve reducing captive limits or exposures while transferring more risk to the commercial market.
DeVoe-Talluto said such changes reflect how companies adapt their strategies in response to available capacity.
“We continue to experience significant growth, so it may take several years in a broad, sustained soft market to be reflected in captive formations,” he said.
Vermont reached a milestone at the beginning of 2025, reporting a total of 1,370 captive insurance licenses since the inception of its program. Of these, 683 were active and 29 designated as dormant.
While Vermont continues to attract new formations, the sector faces external scrutiny, particularly from federal agencies. In June, several captive industry associations petitioned for the repeal of an IRS rule targeting micro-captive arrangements.
Industry stakeholders argue that the rule places an undue burden on small businesses that use captives for legitimate risk management purposes.
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