• Vermont legislators could
approve agency captives within
• The state is considering
commercial agency captives only.
• Agency captives may require a
Agency captives have become increasingly popular in recent years, with more and more large associations with hundreds
or even thousands of members
looking to insure themselves.
Vermont, the leading domestic
captive domicile, is currently working
on legislation to allow them and
could see it approved in a month.
An agency captive is essentially a
reinsurance company owned by an
insurance agency or brokerage that
works through an agreement with a
fronting carrier, whereby the captive
receives a share of all premiums
written and retains any investment
income, but in return it has to pay a
portion of the claims.
Most agency captives write
business owner policy, package,
general liability, errors and
omissions, workers’ compensation
and auto liability.
The fronting carrier handles the
underwriting and provides specific
and aggregate loss protection, while
the captive manager runs the day-to-day operations, limiting the financial
risk and administrative burdens on
The concept of an agency captive
or producer-owned reinsurance
company (PORC) is nothing new;
consortium is one group
taking a serious look
at forming an agency
captive in Vermont.
By Alex Wright
Vermont’s proposal to allow agency captives is likely to pass before the legislative
session ends in May.
VERMONT REPORT 2017
Vermont Eyes Agency