Bermuda remains the number one domicile for captive insurance companies despite an upsurge in business for rivals like Vermont in the US.Thirty-three new captives were set up in the State of Vermont last year as it surpassed the 900 milestone following the licence of Lincoln Financial Group, according to data released by the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA). Of those, 576 were active and they account for more than $17 billion in total premiums written, as of December 31, 2010.Bermuda had 885 active captives with $18.8 billion in gross written premiums in 2009, as revealed in an industry report published by the Bermuda Monetary Authority (BMA) in August last year. The BMA did not disclose current figures for captives formed and leaving the Island over the past 12 months by press time.Meanwhile the Insurance Managers Association of Cayman’s website lists 760 active captives with $7.5 billion in gross written premiums as of June 30, 2010.But Tom McMahon, president of Bermuda Insurance Management Association (BIMA), was not unduly concerned about the recent success enjoyed by Bermuda’s competitors.“Based on what I have seen coming through from the other domiciles, mainly Vermont and Cayman, I think the numbers prove that Bermuda is still holding its own and while the numbers all over the domiciles have been down for the last couple of years I think the activity in 2010 proves once again that Bermuda is the place to come and is maintaining the number one position,” he said.Mr McMahon said that companies looking at coming to the Island were seeking a quality domicile that knows what is do doing and has decades of experience.He admitted that there was some doubt among captive owners about whether to stay offshore or come onshore and he was not surprised to see Vermont gain some traction in picking up new business as one of the most aggressive onshore domiciles in terms of marketing itself.On the flip side, Mr McMahon said he had seen a lot of interest from Canada and Latin America, reflected in a highly successful ALARYS (Latin American Risk and Insurance Management Association) conference held in Bermuda in October.And he added that the reputational risk of being based offshore was not as big an issue as some people had made it out to be and he had conducted a number of discussions with large organisations over the past 12 months and they had not raised any concerns about going offshore.Dan Towle, director of financial services for the State of Vermont, said that in any given year between three to five captives redomiciled to Vermont, one to two of which were from offshore centres.Mr Towle said that the state focused on selling itself as a domicile rather than targeting existing captives in other jurisdictions, through its reputation, track record, expertise, regulatory environment and infrastructure.“It is very gratifying to see the growth in new licences in 2010,” he said.“We are continuing to see companies take control of their own risk by forming captive insurance companies, despite the soft commercial insurance market.”The new captives formed include 19 pure captives, nine special purpose financial captives , four new risk retention groups, and one industrial insured captive, bringing the total number of licences issued in Vermont to 911.“The activity in 2010 reflected a wide diversity of lines, with new energy in securitisation and healthcare,” said David Provost, deputy commissioner of BISHCA.“The applications were very high quality, and we anticipate continued growth in 2011 - and we are committed to allocating the resources necessary to provide consistent and quality service.”Industry expert and consultant Andrew Barile, CEO of Andrew Barile Consulting Corporation Inc., said that with captive owners aiming to reduce reinsurance, as well as domicile and regulatory costs, domiciles like Vermont were getting a lot of attention due to their user friendliness, co-operation and efficiency, while well-established Bermuda captives were considering other options.“The ultimate decision for domicile continues to be the owners’ preference,” he said. “Competition continues to heat up for the domicile selection and captives are making sure the feasibility study covers all aspects of domicile costs.”Some of the companies in Vermont’s class of 2010 were NBC Universal Inc, PricewaterhouseCoopers LLP, Aetna Inc, Procter & Gamble Company, Crowe Horwath LLP, Towers Watson & Co and Nationwide Financial Services Inc.Captive insurance companies formed by the healthcare industry to insure their unique risk continued to be one of Vermont’s fastest growing sectors, including EmblemHealth Inc, Albert Einstein Healthcare Network, a group of Midwestern Physicians, Nursing Homes & Home Healthcare Agencies, and a group of New Hampshire Hospitals.“Vermont will not rest on its laurels and we remain committed to being the gold standard of domiciles,” said Vermont Governor Peter Shumlin, in a press release.“Vermont is aggressively pursuing new opportunities to expand the captive industry. While some of our domestic competitors have reduced their commitment to promoting and regulating captives, Vermont is investing in this valuable sector of our economy.”Richard Smith, president of the Vermont Captive Insurance Association (VCIA), said that while his organisation had no active marketing campaign in Bermuda or other domiciles, it would continue to market generally and focus on the key selling points of launching a captive in the US state, including laws and regulations that keep pace with industry needs, and an infrastructure made up of leading captive management professionals, attorneys, bankers, accountants, actuaries, and investment managers and the largest captive trade association in the VCIA, as well as a experienced and knowledgeable regulatory team.