Vermont

Vermont

Vermont maintains a regulatory system that attracts quality business, promotes Vermont’s reputation in the industry, and safeguards the solvency of captive insurers while recognizing the special purpose for which they are created.

[Last updated: 14/11/19] 

Regulatory contact:
David Provost, Deputy Commissioner of Captive Insurance, 
Department of Financial Regulation, Captive Insurance Division
Address of regulator
89 Main Street
Montpelier, VT 05620-3101
Telephone Number
802-828-3304
Email Address
David.Provost@vermont.gov
Website
www.dfr.vermont.gov/industry/captive-insurance



Name of Captive Legislation
Title 8 Vermont Statutes Annotated, Chapters 141 and 142
 
Year Legislation Passed
1981 under Vermont’s Special Insurer Act
 
Recent Amendments

https://legislature.vermont.gov/bill/status/2020/S.109

Act No. 3 (S.109). Insurance; captive insurance companies; risk retention groups An act relating to captive insurance companies and risk retention groups This act makes various amendments to Vermont law as it pertains to captive insurance companies and risk retention groups. For example, it specifies that an incorporated protected cell may pay dividends and make distributions, subject to the approval of the Commissioner of Financial Regulation; permits a captive insurance company, a sponsored captive insurance company, and an incorporated protected cell to be formed as any type of entity, subject to the approval of the Commissioner; extends the examination period from three to five years; gives companies greater latitude with respect to their investments; clarifies that a sole proprietorship may participate in a sponsored captive insurance company; and requires affiliated reinsurance companies to report using statutory accounting principles consistent with NAIC (National Association of Insurance Commissioners) standards. In addition, the act revises the statutory definition of “independent director” applicable to the board of directors of a risk retention group and requires risk retention groups to perform an “own risk and solvency assessment.” Effective Date: April 18, 2019
 
Do you allow Cell Captives?
Yes.  See 8 V.S.A. Chapter 141, Subchapter 2. Sponsored Captive Insurance Companies, Sections 6031 – 6039.
 
Total Number of Licenced Captives (31 Dec 2018)
1137 Total Licenses Issued; 558 Active Captives; 22 Dormant Captives
 
Number of Risk Retention Groups or Group Captives
87 Risk Retention Groups
14 Association Captives
23 Industrial Insured Captives
 
Number of Single Parent Captives
350 Pure Captives
45 Special Purpose Financial Insurers
 
Number of Cell Captives
32 Sponsored Captives (199 cells)
 
Number of licences granted in the past year (2018 calendar year)
25
 
Approximate (or Average) length of time to process a new captive 
30 days or less upon filing of a completed application for admission
 
Captive tax rates
Minimum: $7,500, maximum $200,000.  $5,000 tax credit for new captives in each of the first two years of licensure
Captives under common ownership and control may be consolidated for premium tax calculation.  Direct premium tax rates: 0.38% on the first $20 million; 0.285% on the next $20 million, 0.19% on the next $20 million, 0.072% thereafter.
Assumed premium tax rates: 0.214% on the first $20 million; 0.143% on the next $20 million, 0.048% on the next $20 million, 0.024% thereafter.
 
Minimum capitalisation rate 
Pure or Sponsored = $250,000
Industrial Insured or Association = $500,000
Risk Retention Group = $1,000,000
Special Purpose Financial Insurer = $5,000,000
The Commissioner may prescribe additional capital.
 
Licencing fees 
Initial and annual license fee = $500
Actuarial application review fees = $6,000 (all types except SPFIs); SPFIs = $10,000
 
Industry sectors best represented in the domicile 


MANUFACTURING


96


HEALTHCARE


100


INSURANCE


73


BANKING


28


CONSTRUCTION


36


PROFESSIONAL SERVICE


28


TRANSPORTATION


26


RETAIL


23


ENERGY


22


REAL ESTATE


22


RELIGIOUS INSTITUTIONS


20


EDUCATION


20


NONPROFIT OR MUNICIPALITY


13


SECURITIES


9


OTHER


11


COMMUNICATIONS


8


ENTERTAINMENT


7


TECHNOLOGY


6


FINANCING, LENDING, LEASING


5


AGRICULTURE


5


HOTELS


3


MEDIA


2


WASTE MANAGEMENT


3

 

Top 5 uses for Captives in the domicile

Property
General Liability
Workers Compensation & Employers Liability
Professional Liability
Auto Liability and Auto Physical Damage
 
Total premiums received by the Captives (2018)

$22.6 billion
 
Total value of assets under management (12/31/2018)

$191.1 billion

Captive Insurance Managers registered to conduct business in the domicile (with number of licensed captives managed by each insurance manager) (as of 29 May, 2018, includes active and dormant captives)

Advantage Insurance Management (USA) LLC                        3

AIG Insurance Management Services, Inc.                             39

Alterna LLC                                                                         3

Amethyst Captive Insurance Management                              4

Aon Insurance Managers (USA) Inc.                                      155

Apetrop USA, Inc.                                                                0

Artex Risk Solutions, Inc.                                                     17

Beecher Carlson Insurance Services LLC                                8

Global Insurance Management & Consulting LLC                    5

Intuitive Captive Solutions LLC                                             2

JLT Towner Insurance Management (USA) LLC                       30

Lexicon Insurance Management LLC                                     0

Liberty Mutual Management (Vermont) LLC                           2

Marsh Management Services, Inc.                                        168

Premier Insurance Management Services, Inc.                      2

Quest Captive Management LLC                                           3

Risk Services - Vermont                                                      10

SOBC Services Company Limited                                         1

Strategic Risk Solutions (Vermont) Ltd.                                54

USA Risk Group                                                                  29

Willis Towers Watson Management (Vermont), Ltd.                50

Self/Parent-managed                                                          5

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