Members of the Vermont Captive Insurance Association (VCIA) have testified before the Vermont House Commerce and Senate Committee on the proposed HR 85 captive bill which aims to make Vermont a more attractive domicile for captives, in particular small captives, as well as making the current law clearer.
One of the more prominent proposed changes to Vermont’s captive statue is the change from the current $7,500 first-year premium tax credit to a $5,000 credit in each of the captive’s first two years.
David Provost, deputy commissioner of the Department of Financial Regulation, suggested this reduction of the tax burden in the early years of the captive’s life would keep Vermont comparable in cost to other domiciles with low taxes, at least for the first few years.
“This should act as another enticement for smaller captives to domicile in Vermont,” said Dustin Partlow, director of JLTIM USA, a captive consultant and partner of Hanover Stone Partners.
The amendments to the bill would also allow all types of captive to enter dormant status, where the premium tax is waived and the company stays in Vermont, ready to be reactivated when and if the need arises.
“Allowing all types of captives to choose dormant status should also help keep additional inactive captives in the state,” Partlow continued.
The proposed bill also tightens up language in certain areas, including risk retention groups, incorporated protected cells and allowable accounting principles.
VCIA members presented this captive bill and met with a number of other legislators at its annual Members Legislation Day, held in Montpelier on January 26.
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VCIA, Vermont, Captives, Legislation, North America