Phil Scott, Governor of Vermont
Vermont Governor Phil Scott has signed new legislation that strengthens the state's captive insurance laws.
The bill includes new policies related to Vermont’s captive protected cells, which the state has identified as a promising area for growth.
It provides for simplified disclosure requirements for agency captive owners, and allows regulatory discretion in setting the capital of an uncapitalised dormant captive, allowing them to be maintained at minimal cost, for future reactivation in Vermont. There is a reduced minimum core capital requirement for a sponsored cell captive to $100,000, from $250,000 previously.
Greater flexibility has been introduced to allow captives to insure unaffiliated business in a cell under the same circumstances as might be allowed in a stand-alone captive. Cells are also explicitly allowed to form separate accounts within a given cell, mirroring provisions for standalone captives and extending the protections of statutory clarity.
The new legislation also provides flexibility in investments by giving sponsored captive companies, and the cells within said companies, the option to follow the old rules or develop a plan for Department of Financial Regulation approval. The timing of examination reports for risk retention groups has also been aligned with National Association of Insurance Commissioners (NAIC) accreditation standards.
“One of the key changes recognises the importance of cells in the captive industry, and makes it clear that a cell can operate—and should be regulated—much the same as an individual captive,” said deputy commissioner of captive insurance, Dave Provost. “I believe the captive industry will welcome this change, along with other updates included in the bill.”
Scott said the Bill proves that Vermont does not take its position in the captives sector for granted. “We are firmly committed to keeping pace with the ever-evolving needs of the captive insurance industry,” he said.
Richard Smith, president of the Vermont Captive Insurance Association, praised the governor for finding time to pass the legislation, despite the challenges of managing the COVID-19 pandemic.
Scott added: “COVID-19 has dramatically changed the way we all work, live and play, however it has not changed Vermont’s continued commitment to be the gold standard within the captive insurance industry.”
Phil Scott, Richard Smith, Dave Provost, Vermont Department of Financial Regulation, National Association of Insurance Commissioners, NAIC