Bermuda has been overtaken by Vermont to lose its long-held position as the world's leading captive domicile, according to The Captive Review magazine.But that assessment - derived from a weighting system based on captive numbers, premium and assets under management - was contested by leading members of a Bermuda delegation at a captive conference in Arizona yesterday.In terms of numbers of captives, Bermuda is still number one, with 845, compared to the Cayman Islands' 738 and Vermont's 576. But the magazine found Vermont to be the leader on both assets under management and premium.The magazine said assets under management in Vermont of $134.4 billion compared to Bermuda's $118 billion, while captive premium was $73.8 billion in Vermont and $19.6 billion in Bermuda.Another publication, Business Insurance, also published captive domicile rankings yesterday and had Bermuda at number one, based on captive numbers.Tom McMahon, president of the Bermuda Insurance Managers Association, told The Royal Gazette yesterday: “It seems to be based on one year's premium levels, but from an overall perspective Bermuda is still number one.”Mr McMahon was part of a dozen-strong delegation of captive managers, lawyers, accounts and regulators at the Captive Insurance Companies Association conference in Tuscon, who were busy yesterday networking at the Bermuda Insurance Development Council booth.Making up the rest of the top ten are Guernsey (333), Anguilla (252), Luxembourg (249), Barbados (242), the British Virgin Islands (219), Utah (188) and Hawaii (168).The Captive Review article quotes Brady Young, president and chief executive officer of Strategic Risk Solutions (SRS) as saying the tax advantage of being offshore had gone and that it had become politically incorrect to base offshore.“Arizona, South Carolina, Utah and others have attracted big captives from Bermuda and have landed new ones that historically would have gone offshore,” he added.Mr Young also said: “Bermuda has positioned itself as more of an insurance company domicile and is not really focused on captives, unlike every other domicile listed.”That statement went down particularly badly with Mr McMahon, who said: “I take great exception to that.”Just last week, he said he had been part of a Bermuda delegation in Brussels for talks with European Commission officials on Europe's planned new Solvency II rules. The group was arguing the case for captive insurers, who predominantly underwrite the risks of their parent corporations, to be treated differently under the regime from commercial insurers writing higher-risk third-party business.Solvency II will require insurers to hold more capital but whether there will be different treatment for captives is not yet clear.After a couple of lean years for new incorporations, Mr McMahon said there were prospects for growth in the Bermuda captive market.“We see a lot of opportunities for new business particularly coming from Latin America and Canada, so I'm confident that Bermuda will continue to be number one.”That point was seconded by Shelby Weldon, director of insurance licensing and authorisations, at the Bermuda Monetary Authority. “We are seeing some interest from a number of parties in Canada,” he said.“Barbados has been their traditional domicile of choice, but from the interest we've seen in the first two months of this year, I would expect to see growth in that area.”Nick Dove, chairman of R&Q Quest Management, also with the Bermuda group in Arizona, said about the Captive Review findings: “I think the stats they used were skewed by a couple of extremely large captives that produced significant premium.”He said the fact that Bermuda had one of the largest delegations at the Tuscon event was reflective of its importance as a captive domicile.The Captive Review also quoted Charles Winter, head of risk finance at Aon Global Risk Consulting as saying about the survey: “It confirms and further illustrates the notion that captives are no longer formed for tax reasons and suggests offshore domiciles may be in relative decline.”Eduardo Fox, corporate commercial and trusts manager at Appleby in Bermuda saw the situation differently, suggesting that much of the growth for US domiciles had come about through state-run organisations that were keen to base thier captives on home soil.“The majority of captives that really matter go offshore, especially to Bermuda,” Mr Fox said. “Before Vermont and Delaware, Bermuda had no US competition and there still isn't competition for multinational companies.”Mr Fox said he saw great opportunities for Bermuda from Mexico, following recent changes to Mexico's tax law, which lowers the withholding tax rate to Bermuda-based captives. He added that the Island was in negotiations with Brazil, Argentina and Chile to forge similar arrangements.