Captive Insurance - Domicile

Domicile

Captives are licensed by many jurisdictions. The captive's primary jurisdiction is known as its domicile. Most captive insurers are based "offshore", in places such as Belize, Bermuda, The Cayman Islands, Ireland, Guernsey, Luxembourg, Barbados, Malta, Singapore, Anguilla, the British Virgin Islands, Qatar Financial Centre and Dubai International Financial Centre.

Bermuda is the world's leading offshore captive domicile. The onshore regulatory burden and the cost of operating either a U.S.-based or Lloyd's-based captive in the early 1960s drove Reiss to seek out a jurisdiction that would allow his captive concept to flourish. After much investigation, he chose Bermuda, due to its geographical location, clean reputation and status as a British Dependent Territory, which avoided the risks and uncertainties often experienced by international businesses operating in politically unstable and unaccountable jurisdictions. Bermuda's captives are predominantly owned by large U.S. corporations. The Cayman Islands is the second largest licensing jurisdiction in terms of the number of captives licensed. Vermont is second in terms of insurance company assets but third in terms of captives licensed.

A recent trend has various States in the United States revising their regulations to be more attractive to captive insurance companies. For example, Oregon has removed premium taxes from captives, instead charging a $5000 annual fee. In the United States, Vermont is home to more captive insurers than any other U.S. state, with nearly 900 licensed captive companies as of August 2009.. In recent years, Anguilla has been the fastest growing offshore domicile in numbers of captives, and Delaware and Utah have been the fastest growing US domiciles.