The Governor of Vermont, Peter Shumlin, will sign in new captive legislation today (May 7, 2015).
The legislation, which was passed in the 2015 session, aims to strengthen Vermont’s captive legislation in a number of areas including changes to the investment guideline to allow marketable securities along with cash, trusts and letters of credit to meet the minimum capital requirement.
According to Vermont’ captive division, expanding the investment guidelines for the minimum capital requirement is a significant change that has already attracted considerable interest.
“This change is consistent with current investment guidelines for Vermont’s traditional insurance companies and will increase the liquidity options for companies,” it said.
Shumlin added: “These improvements in Vermont’s law may seem technical, but taken as a whole they continue to advance Vermont’s standing as the ‘Gold Standard’ for domiciles and will provide greater flexibility and clarity going forward for our companies.”
The law also modifies the minimum capital for cell companies to $250,000 and adopts the National Association of Insurance Commissioners (NAIC) governance standards for Risk Retention Groups (RRGs) and portions of NAIC Protected Cell Company Model Act.
"The legislation makes Vermont’s captive law more attractive and sends a strong message to the industry that we are committed to our leadership role,” said David Provost, Deputy Commissioner of Vermont’s captive division.
Richard Smith, president of the Vermont Captive Insurance Association, which lobbied for the changes, added: “We’re delighted to have the continued support of the Governor and the Legislature in keeping pace with the changing needs of the industry. We’re especially proud to implement the new investment guideline for minimum capital requirements making Vermont the first domicile to do so.”
Peter Shumlin, Vermont, NAIC, RRGs, Vermont Captive Insurance Association, Richard Smith, David Provost, North America