View from the top: Vermont’s take

As the leading captive domain, how does Vermont see the landscape that lies ahead? Captive Review quizzes Brittany Nevins (pictured), the state’s economic development director.

Vermont has consistently updated its captive framework to reflect changes in the global risk landscape. Looking back over the past 12 months, which regulatory or legislative developments do you believe have been most significant, and why?

One of the most important developments has been our continued focus on ensuring Vermont's captive framework remains responsive to evolving risks while preserving the strong regulatory foundation that has been central to our success. Rather than pursuing change for its own sake, we evaluate statutory and regulatory updates carefully every year to ensure they address emerging market needs.

Our most recent updates reflect our long-standing approach of making thoughtful, targeted updates that strengthen our regulatory framework while responding to the evolving needs of the captive insurance market. The most recent bill, H.649, codifies several established regulatory practices, enhances regulatory clarity and strengthens oversight in key areas. 

For example, it formalises requirements for quarterly financial reporting by risk retention groups, reinforces safeguards to ensure premium and surplus funds remain available to pay claims and aligns funding certification requirements for protected cells with those already applicable to licensed captive insurers. These updates reflect industry best practices while providing greater consistency and certainty for captive owners.

More broadly, the legislation demonstrates Vermont’s collaborative approach to regulation. Each year, regulators, legislators and industry stakeholders work together to evaluate where refinements are needed to ensure our framework remains both stable and responsive. That balance, preserving strong governance and financial standards while adapting to emerging risks, is one of the reasons Vermont continues to be recognised as the gold standard for captive insurance.

Beyond H.649, we continue to refine our regulatory processes to improve efficiency, modernise oversight and provide appropriate flexibility, while closely monitoring emerging risks such as AI and evolving corporate risk financing needs. Our objective is to ensure Vermont's regulatory framework remains appropriate today while positioning the industry for long-term success as the risk landscape continues to evolve.

Captive owners increasingly expect regulators to balance strong oversight with operational efficiency. How is the Department evolving its approach to regulation, reporting and engagement to meet those expectations while maintaining Vermont's reputation for prudential supervision?

Our philosophy has always been that effective regulation and efficient regulation are not mutually exclusive. Captive owners value predictability, responsiveness and transparency, and we believe those characteristics strengthen prudential oversight.

We're continuing to streamline regulatory processes where appropriate, leveraging technology to improve filings and communication, while maintaining a highly accessible regulatory team that works collaboratively with captive owners and their service providers. At the same time, Vermont’s expectations around governance, capital adequacy, enterprise risk management and financial reporting remain rigorous. The goal is to focus regulatory attention where risk is greatest, allowing lower-risk activities to proceed efficiently while ensuring appropriate oversight across the industry.

“Vermont's competitive advantage has never been based solely on legislation or cost. It is built on experience, consistency and regulatory credibility.”

New and emerging risks – including cyber, artificial intelligence, supply chain disruption and climate-related exposures – are reshaping captive strategies. How is Vermont adapting its regulatory framework to support innovation while ensuring captives remain financially sound?

Captives have always been an effective tool for addressing risks that are difficult to insure in the traditional market, and today's emerging risks are a natural extension of that role.

Our regulatory approach is risk-focused rather than prescriptive, allowing us to evaluate each captive based on its unique business model and risk profile. We assess every application uniquely, focusing on key factors such as underwriting assumptions, governance, reserving methodology, capital adequacy and enterprise risk management.

Whether a captive is underwriting cyber risk, financing AI-related exposures, addressing supply chain disruptions or managing climate-related risks, our focus remains consistent. This approach provides the flexibility to accommodate innovation while maintaining the strong regulatory standards that have long distinguished Vermont and set the stage for captives to thrive.

Competition among captive domiciles remains intense, both within the US and internationally. What do you see as Vermont's key differentiators in 2026, and how is the state working to maintain its leadership position?

Vermont’s competitive advantage has never been based solely on legislation or cost. It is built on experience, consistency and regulatory credibility.

Vermont's competitive advantage extends beyond its modern regulatory framework. It is built on decades of experience, a consistent and predictable regulatory approach, and a strong ecosystem of industry professionals, including an active trade association and an experienced network of service providers.

We have one of the most sizable and experienced captive regulatory teams in the world, supported by a mature ecosystem of captive managers, actuaries, auditors, attorneys and other professional service providers. Our regulatory approach is well understood, predictable and collaborative, which provides confidence to organisations making long-term risk financing decisions.

Maintaining leadership means continuing to invest in regulatory expertise, engaging with industry stakeholders, monitoring global developments and ensuring our framework evolves thoughtfully as new risks and business models emerge. Our objective is to remain the domicile of choice for organizations seeking both regulatory sophistication and long-term stability.

We are seeing continued growth in more sophisticated captive structures and risk-financing arrangements. Are there particular trends in captive formations, business plans or lines of coverage that are influencing the Department's regulatory priorities?

We're seeing continued interest in captives as organisations seek more strategic approaches to enterprise risk financing. Many new formations involve broader, more integrated risk management strategies rather than simply addressing a single line of coverage or solely the financing of risk.

We're also seeing increased activity involving cyber risk, employee benefits, medical stop-loss, along with more complex group and cell structures in appropriate circumstances. We’ve seen increased usage of our conversion rules recently, where a certain type of captive can convert to another type that better suits long-term objectives. These developments reinforce the importance of robust governance, strong actuarial support and comprehensive enterprise risk management.

From a regulatory perspective, our priorities remain to ensure that business plans are appropriately designed, risks are well understood and captives maintain sufficient capital to meet their obligations under a range of stress scenarios.

As the captive sector evolves, where do you see the greatest opportunities and challenges for Vermont over the next three to five years, and what role will regulatory development play in addressing them?

The greatest opportunity for Vermont over the next three to five years is to continue demonstrating that high-quality regulation is a competitive advantage, not only for Vermont, but for the captive insurance industry as a whole. As organisations face increasingly complex risks and greater demand for alternative risk financing solutions, captives will continue to play an important role. Sustaining that growth, however, depends on maintaining confidence in the captive insurance model itself.

That makes the quality of regulation more important than ever. Effective, risk-focused oversight helps preserve the integrity and long-term credibility of captive insurance. It also creates meaningful value for captive owners by providing expert oversight that strengthens confidence among boards of directors, parent organisations, auditors and other stakeholders. Ultimately, high-quality regulation supports the financial strength, stability and long-term success of captives while reinforcing confidence in the captive insurance model as a whole.

As competition among domiciles continues to increase, Vermont’s strategy will not be to compete by lowering standards. Instead, we will continue to distinguish ourselves through experienced regulation, thoughtful modernisation and a collaborative approach to legislative and regulatory development. Our focus will remain on refining the framework where appropriate, improving efficiency and providing flexibility while preserving the disciplined oversight that has made Vermont the global benchmark for captive insurance regulation. By continuing to raise the bar for regulatory excellence, we strengthen both Vermont's leadership and the long-term success and credibility of the captive insurance industry worldwide.

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