I had the pleasure of attending the third annual Alberta Captive Conference in Calgary this past April and came away quite impressed. The event was packed, traffic was heavy, the presenters were excellent and the conversation was lively - all great signs of a domicile on the upswing.

Over the years, I have advised several states considering enacting captive legislation or striving to implement a new captive law.  My reports and presentations have always focused on a few key dimensions:

1. Local Flavor – leverage what your state/province does well
2. Flexible Captive Law – permitted structures allow creativity in captive design
3. Balanced Regulation – the classic three bears issue: too hot (too willing to say “yes” to anything) and too cold (too prone to “no”). Both or either of those can create problems
4. Strong Core – Both service providers and captive owners.

Based on Pinnacle’s experience supporting the formation of Alberta captives as well as what I saw at the April conference, I see a lot of positives in all of these areas.

Alberta’s diverse economy of natural resources, energy, agriculture, tourism, real estate, finance and technology lends itself immediately to proven captive strategies. Alberta also has the advantage of being a strong onshore alternative for existing Canadian captive owners who have traditionally domiciled offshore predominantly in Barbados, Bermuda and Cayman.

Looking at Alberta’s captive law, it is the flexible approach to limited partnerships and associations, as well as the ability to insure risk in other Canadian provinces, that are all clear positives. During the Alberta captive conference, it was also clear that there are continued efforts to enhance the province’s law, including facilitating cell captive structures and group captives (in some form). Finally, it is clear that Alberta’s captive leadership views that a captive law with features comparable to other leading domiciles as not only desirable, but achievable.

I came away from the Alberta Captive Conference particularly impressed with the regulators. I was reminded of some of the most successful U.S. domiciles that were able to achieve that delicate balance of trying to regulate to “yes,” while still maintaining a rigorous regulatory framework. Pinnacle has experienced this regulatory balance on the captive applications we have provided feasibility studies for in Alberta.

A strong core of not only service providers (actuaries, auditors, captive managers, fronting carriers, lawyers, etc.), but crucially captive owners are the engine that drives a captive domicile’s growth. I have been struck by the number of service providers not only active in Alberta but increasingly, the number of those with local personnel. Captive owners were also very present and visible at the conference.

It is clear from the growth in the number of captives domiciled in Alberta that the domicile is trending in a positive and important direction. It is the domicile’s fundamentals: Alberta’s  economy, regulation and regulators, service providers and captive owners that provides even more cause for future optimism. It is an exciting time for Alberta and more good things are on the way. As a firm, Pinnacle looks forward to continuing to being a part of this thriving domicile.