Vermont DFR: HB 649 reaffirms Vermont’s captive insurance industry as gold standard

The Vermont Department of Financial Regulation (VDFR) has welcomed the passage of House Bill 649, which was signed into law on March 24, 2026, Governor Phil Scott. 

The bill was the State of Vermont’s annual captive insurance bill, reaffirming Vermont’s commitment to licensed captive insurance companies by enhancing regulatory clarity, strengthening oversight, and supporting continued innovation across the sector. The bill is scheduled to take effect July 1, 2026.

“Vermont continues to have a very strong captive insurance industry,” said Governor Scott. “This year’s updates keep with our practice of working together with regulators and industry leaders to maintain our framework which is strong, competitive, and responsive to evolving risks.”

The bill introduces several important updates to Vermont law governing captive insurance companies: 

• It prohibits risk retention groups from making loans to, or investments in, their member-owners and/or affiliates, codifying our longstanding regulatory practice designed to ensure premium and surplus funds remain available to pay member claims and to avoid conflicts of interest.

• It codifies the requirement for quarterly financial statement filings for risk retention groups, again formalising existing practice in accordance with standards promulgated by the National Association of Insurance Commissioners.

• It requires protected cells, upon formation, to certify that funding is in place consistent with their approved business plans, aligning requirements for these entities with requirements already applicable to licensed captive insurers to reflect their increasing role in risk financing and risk retention.

“This bill demonstrates both the strength of Vermont’s laws and our commitment to continually enhancing them,” said Christine Brown, deputy commissioner of Captive Insurance at the VDFR. “H.649 advances our strong foundation, ensuring alignment with evolving risks and industry best practices.”

Vermont remains widely recognised as the “gold standard” of captive insurance domiciles, with more than 1,400 licensed captives and decades of regulatory leadership. Recent recognition and continued licensing activity underscore the state’s global standing and the strength of its collaborative regulatory approach. This annual legislative update reflects Vermont’s long-standing model of engagement among captive insurance companies, regulators, and stakeholders.

“Vermont’s approach to captive regulation is rooted in expertise and responsiveness,” said Brittany Nevins, captive insurance economic development director, Vermont Department of Economic Development. “The updates included in H.649 reflect ongoing collaboration with industry and ensure that our regulatory framework continues to adapt to emerging risks while preserving the stability and integrity that captives depend on.”

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