New non-profit subsidiary to provide malpractice insurance across the network
Vermont Business Magazine The University of Vermont Health Network has completed the process of relocating its captive insurance company to Vermont. The VMC Indemnity Company, LTD, board of directors voted unanimously in 2017 to relocate the health network subsidiary that provides medical malpractice insurance coverage for its medical providers. The decision came after a thorough analysis conducted by the health network that showed the UVM Health Network could continue to provide cost-effective coverage to our providers while locating it in Vermont.
“Our analysis showed that relocating to Vermont had become less expensive than previously anticipated and an attractive option – one that we are happy to embrace,” said John Brumsted, M.D., president and CEO of the UVM Health Network and a VMCIC board member. “We are pleased to be able to do business locally and be a part of Vermont’s world-class captive insurance industry.”
The network’s captive insurance company was first created and domiciled in Bermuda in 1993. Since then, Vermont has emerged as a world leader in offering a predictable and stable regulatory structure for captive insurance companies – a standard self-insurance practice option for academic medical centers that can make malpractice insurance less expensive than commercial insurance companies.
“It’s great to see the UVM Health Network take this step, and to count them among the growing list of academic medical center and health care captive organizations located in Vermont,” said Vermont Governor Phil Scott. “Vermont’s financial regulatory team and deep bench of captive professionals are recognized as among the most experienced and knowledgeable in the world, and this move by UVMHN further validates the state’s leadership in this industry.”
The Vermont Department of Financial Regulation was a strong partner throughout the process and assisted in creating a smooth transition to Vermont for VMC Indemnity Company.
“Captive insurance is a responsible tool to help institutions manage and finance risk. The savings generated compared to commercial insurance are retained and can be used to fund programs to improve healthcare outcomes,” said Department of Financial Regulation Deputy Commissioner David Provost.
A non-profit corporation has been established to become the UVM Health Network’s captive insurer. It has received approval from the Internal Revenue Service to operate as a tax-exempt organization.
The change in location has no impact on the providers insured by the plan, or on the cost of health care in Vermont. The state of Vermont will collect approximately $50,000 annually in premium taxes from the network’s captive insurance company.
About The University of Vermont Health Network
The University of Vermont Health Network is an academic health system that is comprised of six affiliate hospitals, a multi-specialty medical group, and a home health agency. We serve the residents of Vermont and northern New York with a shared mission: working together, we improve people’s lives. Our partners include:
- The University of Vermont Medical Center
- The University of Vermont Health Network Medical Group
- The University of Vermont Health Network – Alice Hyde Medical Center
- The University of Vermont Health Network – Central Vermont Medical Center
- The University of Vermont Health Network – Champlain Valley Physicians Hospital
- The University of Vermont Health Network – Elizabethtown Community Hospital
- The University of Vermont Health Network – Porter Medical Center
- The University of Vermont Health Network – Home Health & Hospice
Source: BURLINGTON, VT – UVMHN 10.14.2019