Vermont captive insurance legislation signed into law
Updates to Vermont's captive law proposed by the Vermont Captive Insurance Association (VCIA) and passed by Vermont's General Assembly were signed into law by Governor Peter Shumlin this week.
Every year, VCIA partners with Deputy Commissioner for Captive Insurance Dave Provost and his team at the State of Vermont in crafting changes to Vermont's captive statute to keep up with the ever changing needs of our dynamic industry. The Vermont General Assembly always looks forward to taking up proposed legislation with VCIA and the State to keep Vermont the premier captive domicile in the U.S.
This year's legislation was included in Vermont's Department of Banking, Insurance, Securities and Health Care Administration's (BISHCA) Housekeeping Bill (H.512), and both expands and clarifies existing captive statutes in Vermont. Because of some changes in the department's responsibilities, BISHCA has been recently renamed the Department of Financial Regulation (DFR). Here are some of the captive highlights in the new law:
- Last year's legislation regarding separately incorporated protected cells in a sponsored captive limited the incorporation to corporations or limited liability companies. The new law allows mutual corporations and nonprofit corporations with one or more members to also incorporate the protected cell. This is consistent with existing law for formation of sponsored captive insurance companies in general.
- The new law allows companies to meet minimum capital and surplus requirements through the creation of a trust, approved by the commissioner, giving captives more flexibility.
- The new law streamlines reporting requirements for association captive insurance companies.
- The new language amends the statute to allow Vermont risk retention groups to be participants in a Vermont sponsored captive insurance company which would allow RRGs to reinsure with Vermont sponsored captives rather than with foreign or alien cell programs.
VCIA's advocacy efforts ensure that the voice and interests of its membership are accurately heard and represented to regulators, the judiciary, legislatures and the executive branch, at both the state and federal levels. Membership in VCIA means clout. With over 450 active member companies - many of whom are well known and well respected industry leaders - VCIA is recognized and listened to during important regulatory and legislative discussions that affect our industry. Whether it's leading a coalition to prevent the IRS from promulgating injurious regulations, VCIA's support of the Risk Retention Modernization Act, successfully fighting the Neal Bill's taxation on reinsurance, or working to update Vermont's captive statutes, VCIA leads the way.