Captive Insurance

At the forefront of the U.S. captive insurance industry for 30 years.

Vermont is the leading U.S. domicile for captive insurers and risk retention groups (RRGs), and Downs Rachlin Martin has been at the forefront of the U.S. captive insurance industry for 30 years.

The state of Vermont became a leader by passing enabling legislation in 1981, thus providing important “on-shore” opportunities for American businesses and associations. Downs Rachlin’s insurance group realized the significance of this enabling legislation and immediately responded with advice to assist captive insurance companies with formation and operational issues. Downs Rachlin has expanded its practice in recent years to represent captives in many domiciles.

Pragmatic ideas powered by those who know the lay of the land.

Downs Rachlin Martin’s captive insurance team informs clients about choice of entity, operational issues, developments under legislation such as the Federal Risk Retention Act, the Terrorism Risk Insurance Act (TRIA), and the Nonadmitted and Reinsurance Reform Act of 2010 (enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010), as well as complex coverage, claims-handling or defense issues that can arise.

Captive insurance legal services.

Our captive insurance clients seek advice on all aspects of their operations, including organizational matters for start-up companies, how to adapt or take full advantage of changes in federal and state regulations and sophisticated risk transfer matters for established entities. Using the right resources drawn from the comprehensive legal services offered by Downs Rachlin Martin, we help clients solve both simple and complex problems involved in all aspects of the insurance industry:

  • tax, regulatory and legislative matters
  • corporate governance
  • entity selection: stock, mutual and non-profit corporations; LLCs; reciprocal exchanges
  • securities laws
  • domicile selection
  • reinsurance matters
  • coverage and defense matters
  • policy language
  • claims-handling procedures
  • reciprocal formation and the role of the attorney-in-fact
  • sponsored captives with segregated cells
  • other routine issues involving alternate risk transfer mechanisms

Downs Rachlin Martin's uncommon value.

The quality of life in northern New England has helped Downs Rachlin attract legal professionals who could easily have joined a firm in a larger metropolitan area. That means you get the type of top legal talent you'd expect from a big, urban firm, but with the personal attention and value associated with a smaller, local law firm.

Local roots, global reach.

Downs Rachlin Martin is the exclusive member firm in Vermont for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+ countries worldwide. As part of the Lex Mundi global network, we can provide our clients with preferred access to more than 21,000 lawyers around the world – all from a single point of contact.

Individually, each Lex Mundi member firm is a leader in its local market. Collectively, Lex Mundi firms provide global legal resources with unmatched depth and breadth. Working with other Lex Mundi firms, we are able to seamlessly handle our clients’ most challenging cross-border transactions and disputes by providing:

  • access to local market knowledge and experience
  • relevant industry focus
  • sound business and language skills
  • responsive service

Recent Accomplishments

Our captive insurance attorneys’ sharp legal skills, technical understanding and comprehensive knowledge of the legal, regulatory and tax issues that shape the captive industry have enabled us to:

  • Represent more than 100 organized and operating Vermont single-parent and group captive insurance companies, including RRGs.
  • Serve as general counsel to a large number of group captive insurers.
  • Receive favorable determinations of tax-exempt status for several captive insurers.
  • Advise captives on risk transfer and risk distribution “safe harbors” for tax purposes.
  • Successfully assist captives with reinsurance coverage disputes.
  • Advise a growing number of companies domiciled in other states and offshore.
  • Provide ongoing claims handling and coverage advice, including best claims practice and protocols.
  • Serve as coverage counsel to captives and RRGs, which has included advice concerning accounting and medical professional liability claims, Hurricane Katrina, Chinese Wallboard and other property losses.
  • Manuscript and rewrite existing insurance policies in programs covering commercial general liability, environmental impairment, professional liability, property loss and business interruption, products liability, employment practices, business interruption automotive liability, cyber risk, employee dishonesty, workers compensation, medical stop loss and terrorism, among others.
  • Serve as counsel to the claims committee and claims administrator for a large professional liability program.
  • Obtain a 100 percent abatement of non-Vermont unitary income tax assessed against the owner of a Vermont captive.
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