Vermont signs new legislation to strengthen its captive oversight
Vermont’s Governor Phil Scott has signed new legislation into law designed to strengthen the state’s captive insurance regulation regime.
Bill S.88 combined changes to Vermont’s insurance and captive insurance statutes in a single bill to help minimise the number of items before the legislature.
The legislation allows cells to be converted into other entities, in accordance with Vermont’s corporation laws.
David Provost, Vermont’s deputy commissioner of captive insurance, highlighted the growing popularity of protected cells. “The department has always liked the idea of cells as an incubator space for captive growth and wants to be sure it is easy for cells to convert to a standalone captive insurance company,” he said.
The new rules also make provisions for mergers and redomestications, two common occurrences that have historically been referenced in the traditional insurance statute but which occur with increasing frequency among captives.
“Vermont has seen a variety of redomestications, where a captive moves their captive from another state to Vermont, and Vermont has benefitted from this movement,” said Richard Smith, president of the Vermont Captive Insurance Association. “We want to make this process and others as clear and simple as possible for companies.”
The remaining changes corrected minor oversights in the 40-year-old bill, to ensure the law more accurately reflects the regulatory procedures: clarifying the requirements for filing organisational documents and the timing of the initial capital contribution; adding agency captives to the list of companies required to file an annual report; and changing the designated agent for service of process of foreign risk retention groups and purchasing groups doing business in Vermont from the Secretary of State to the Commissioner, in accordance with the Liability Risk Retention Act.
“Every year Vermont looks not just at larger recommendations for improvement, but carefully considers all recommendations for improvement,” said Brittany Nevins, captive insurance economic development director. “This is part of what makes Vermont a consistent, trusted and effective domicile.”
It has been 40 years since Vermont passed the Special Insurer Act in 1981, establishing the state’s captive industry.
Governor Scott said: “Vermont is a global leader in captive insurance and continues to collaborate with the sector to ensure we remain a top destination for companies looking to create captives.”