Utah's Captive Insurance Sector: A Dynamic Environment for Innovation and Growth
Captive International talked with Travis Wegkamp (pictured) of the Utah Insurance Department on what the state offers the captive insurance market.
Utah has long been recognised as a proactive and accommodating jurisdiction in the captive insurance industry. Over the past year, the state has not only maintained its reputation but also continued to foster innovation, support alternative risk financing and address unique market challenges through regulatory flexibility and collaboration.
Travis Wegkamp, director of the captive insurance division at the Utah Insurance Department, recently highlighted to Captive International the developments that reinforce the state’s standing as a premier domicile for captives.
“In general, we're just doing everything we can to try to help companies achieve any sort of new and interesting ideas that they've got in terms of alternative risk financing,” Wegkamp explained. “Even if we're kind of a regulatory sandbox. Utah is where the code's written in a way that if you've got an interesting idea, and if it's not explicitly forbidden in the code, we're going to do our best to work with you and try to get a project off the ground and see if it makes sense, if it works.”
“We've been exploring ideas to help to get homeowners coverage in association type captives.”
This sandbox approach is emblematic of Utah’s ethos – encouraging innovation within a structured, transparent regulatory framework. One compelling initiative now being explored involves issuing homeowners’ coverage through association-based captives. While still in the initial stages, this idea has generated considerable interest.
“We've been exploring ideas the last couple years in trying to help in ways to get homeowners coverage in association type captives… We've had a lot of interest in it. Nothing that's really moved on yet, but we're looking forward to that and finding out whether it's going to be a successful sort of idea or not. We have one that might be moving forward here soon,” Wegkamp noted.
In addition to supporting novel insurance structures, Utah is also focusing on practical, community-driven problems. The state has turned its attention to sectors under strain from hard market conditions, such as childcare providers and condominium developers.
“Child daycare groups are struggling to get coverage. We've been working closely with some groups here, as has the governor and his administration, to try to figure out possible ways to help them get more affordable coverage. Captives were explored as an opportunity.”
The high-risk nature of childcare – due to potential incidents such as sexual assault or injury, as well as large liability claims – has made it increasingly difficult for such organisations to find affordable coverage in the traditional market.
“It's the nature of childcare and the liability involved with issues with children. I guess a repeated history of things that have occurred, as well as pretty hefty lawsuits, are driving up the coverage cost for it all.”
Similarly, the construction of condominium-type buildings in Utah has been hit by rising costs related to construction defect litigation. This has caused many developers to shy away from these projects, in favour of apartments or single-family homes.
“They’d rather just do apartments or single-family homes. So there's none of that in-between, sort of condo buildings or dwellings for people to get into where they can start to have ownership and build that equity and wealth.”
Wegkamp elaborated on the fundamental difference between a condominium and an apartment, which plays a central role in the insurance implications.
“It's basically like an apartment, except you own the unit, rather than the builder renting it out. When that happens, hefty lawsuits ca be involved… whereas, if a builder maintain ownership and it's just apartment rentals, if something's wrong, they just have to fix it so they avoid the lawsuit and the punitive damages.”
Utah’s responsiveness to emerging needs is also reflected in recent legislative developments. A significant change was introduced to provide an alternative to the in-state meeting requirement for captives.
“Utah has historically had it and continues to require the captive to meet at least once a year in the state for their board of directors meeting, except we now have an alternative where they could join the Utah Captive Insurance Association at a new, summit level membership, around $4,000. That will satisfy the code requirement, and they don't have to meet physically in the state for that year.”
This move balances regulatory intent with operational convenience, ensuring Utah remains an attractive destination while also benefiting economically.
“It could encourage more captives to make it a little easier, while at the same time ensuring Utah gains some economic reward for having the captive here in the state. We felt this was a good compromise that still maintains some sort of benefit for the state.”
Looking ahead, further innovations may be on the horizon. Wegkamp hinted at exploring more flexible homeowners’ coverage models that extend beyond association captives to pure captives, albeit with strict limitations.
“We may potentially discuss with the commissioner the possibility of a pure captive writing homeowners coverage for its beneficial owners limiting coverage to just the structure. Belongings and any sort of accident, injury or loss of life would be totally excluded from the captive policy.”
By separating property from liability risk, Utah might provide homeowners with a viable new form of coverage through their own captives, responding to growing demand for personal risk management solutions.
Despite these progressive shifts, Utah’s message to the captive community remains consistent.
“It's just a great place to do business, a business-friendly state and in terms of the captive division in the department, we're accessible, and willing to work with you. We have maintain our regulatory hat, but want to find ways for you to succeed. That's really the message. I would say we take pride in your success.”
In summary, Utah is reinforcing its position not merely as a regulatory hub, but as a genuine partner in risk innovation. With a forward-thinking approach, strategic flexibility and a commitment both to economic development and community wellbeing, the state is charting a course that could define the next phase of growth in the US captive insurance landscape.
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