Vermont eyes revisions to captives laws

Vermont’s 2024 captive insurance bill will potentially make some key changes to the state’s existing captives laws, some of which were outlined by Kevin Mead, president of the Vermont Captive Insurance Association (VCIA) in a recent blog post.

He stressed that the VCIA with the VT Department of Financial Regulation and other interested parties to ensure that the statutes and regulations are protective while allowing for innovation and change in what is now a globally competitive marketplace.

There are provisions within the draft bill that clarify the redomestication of protected cells and conversions of other entities into protected cells and privacy. Additionally, there is amended language around parametric risk contracts, effectively adopting a more permissive structure based on recent legal and practice changes.

Another proposed change of note is to halve the minimum capital requirement for agency captives from $500K to $250K. “Of course, these are the statutory requirements, with actual minimum capital being established in the application and licensure process. I imagine this will be of interest to many prospective captive companies,” Mead said.

He added: “The work conducted on these changes is vital to the industry here in Vermont, and it is also fair to say that many other jurisdictions look to what Vermont does through this exhaustive and contributory process, then seeking to amend their own statues in a similar fashion. If you have any questions about this, or the work of the Legislative Committee on both a federal and state level, please feel free to reach out to me.