Gov. Dannel P. Malloy announced Friday that Stamford-based Frontier Communications, which has 15,000 employees nationwide, has chosen Connecticut for the location of its captive insurance subsidiary.
The new subsidiary, Frontier Services Corporation, also is headquartered in Stamford and recently obtained its license from the Connecticut Insurance Department. A captive insurance company is wholly owned by a parent company to insure the risks of the parent and its subsidiaries.
Frontier Services Corporation is the state’s fourth licensed captive insurance company since Malloy’s 2011 comprehensive jobs legislation cleared the way for the state to begin licensing these specialty insurers. Captives are managed by specialty firms that employ a range of financial and legal professionals.
Here is what Malloy and state officials said about the company. It was not disclosed how many jobs might be created by the establishment of the new business.
“Giving employers the tools they need to manage their costs and re-invest in their employees and products is a commitment we have made from day one,” Governor Malloy said. “These specialty insurers are just one example of the steps my Administration has taken to support business, encourage competition and create jobs. We welcome Frontier Communications, a company with deep roots in Connecticut, to this growth sector.”
“Captive insurance has proven to be an effective cost-management tool for employers and many states have enacted laws to attract their business. However, not every state has the skilled insurance workforce expertise or the regulatory expertise that we have here in the Insurance Capital,” Insurance Commissioner Thomas Leonardi said.
“Governor Malloy’s vision and commitment to grow the industry have been instrumental in making sure our laws and regulations continue to attract this growing sector.
With operations in 27 states, parent company Frontier Communications Corporation has been headquartered in Connecticut since 1946. The company is expanding its footprint in Connecticut with the recent announcement that it was acquiring AT&T’s wireline business and statewide fiber network in Connecticut.
Frontier is also acquiring AT&T’s U-verse video and satellite TV customers in Connecticut.
As of Dec. 31, 2012, Frontier had approximately $17.7 billion in assets and revenue of $5 billion.
“Establishing Frontier Services Corporation in Connecticut demonstrates our commitment to the state, to prospective customers and to our shareholders,” said John M. Jureller, Executive Vice President and Chief Financial Officer of Frontier. “By taking advantage of this great opportunity in our home state, we will realize savings that will benefit our stakeholders and contribute to economic growth in Connecticut. Frontier thanks Governor Malloy, the Connecticut Insurance Department, and the Legislature’s Insurance & Real Estate Committee for their support of this important economic sector.”
The co-chairmen of the Legislature’s Insurance & Real Estate Committee praised the announcement.
“As policymakers we recognize the importance of providing employers with the regulatory tools they need to grow their businesses and create jobs in Connecticut. We continue to be responsive to those needs and are committed in ensuring our laws and regulations support the growth of commerce in Connecticut,” Senator Joe Crisco (D-Woodbridge) and Rep. Robert Megna (D-New Haven) said in a joint statement.