Understanding the Implications of Captive Domicile

05/13/2024 Written by: AP Captives

Are you considering joining or starting a captive? Have you thought about the implications the captive’s domicile will have?

With AM Best reporting that there are about 7,000 captives in the world, the choices available to you can be overwhelming! The United States alone lists captives domiciled in 28 states plus the District of Columbia, and depending on how domiciles are categorized, there may be even more. However, most captive experts and sources consider Bermuda, Cayman, and Vermont the top three domicile locations. Read on to learn what to know about a captive’s domicile.

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First and foremost, all parties involved with the captive, including the domicile manager, must have the same goal in mind: a successful captive! To make an informed decision, ask about the domicile’s:

  • Location – as a member, you will have travel requirements and business costs associated with getting to and staying at the chosen domicile location. Consider the effects of being away from your business and the expenses needed to attend meetings.
  • Stability – this includes both regulatory and political associations. The responsibility of the domicile manager is to protect the assets of the group and interface with the domicile’s regulators. This can amount to that person being responsible to two parties: the captive owners and the domicile regulators.
  • Reputation – service support and experience. Not all domiciles are successful. The captive industry is evolving, so domiciles, in turn, must also evolve, or they will fail. For example, several U.S. states successfully established captive domiciles but were not as successful in sustaining them.

“U.S. companies have the choice of onshore domiciles, those based in the United States, or offshore domiciles, which would be located outside of the country,” says Lori Harris, AAI, CPIA, Captive Director. “Business owners and those in leadership need to decide whether their business can accommodate the requirements of a captive’s location.”


Commercial insurance has long been associated with captives; however, employee benefits captives are also experiencing growth in alternative risk strategies. Companies are looking at captives as solutions to rising costs and better options to control risk for commercial and health benefits strategies.

Geoff Christian, MBA, CWCC, Employee Benefits Captive Leader, notes that “Entrepreneurial company leaders are looking for solutions that help them better control plan costs and invest in their employees’ well-being.” Christian understands the right captive fit for a client and brings multiple captives into play, including developing custom-made programs.

In response to a lack of cost-effective medical coverage options for small to midsize companies, AP developed APLUS. This ALPHA captive solution is a bundled, turnkey health insurance solution. In addition to potential cost savings, APLUS provides accountability, simplicity, sharing of best practices, and access to clinical tools unavailable in the traditional market.

Whatever reason a company has for looking at a better way to manage risk, captives can provide a tailored, cost-effective solution. Our team is uniquely qualified to support your move from traditional insurance to an alternative risk management strategy. For more information to help decide if an alternative risk solution is right for your organization, contact us at to talk to a team member about all your options.

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