Vermont's emergence as the main base in the United States for captive insurance entities has been touted as one of the state's great economic-development achievements of the past 30 years. But a report in Tuesday's New York Times raises questions about the wisdom and sustainability of that achievement.

A total of 919 captive insurance operations are now headquartered in Vermont — far more than in any other state. In fact, this mostly Burlington-domiciled sector is the third-largest in the world; only the offshore financial havens of Bermuda and the Cayman Islands have attracted more companies of this kind. Captives, which are subsidiaries formed to provide insurance to their parent companies, account for an estimated 1400 jobs in Vermont, mainly in banks, law offices and accounting firms. And the nearly $24 million in taxes collected from captives' transactions represents about two percent of state revenues.

Many of corporate America's best-known names have established captives in Vermont, starting with B.F. Goodrich in 1981. In addition to pumping hundreds of millions of dollars through Burlington's financial services sector and generating hundreds of high-paying jobs that the recession did not kill off, the captive industry produces no pollution.

This pretty picture has been smudged, however, by the page-one story in the Times' May 9 edition.