Vermont Governor Phil Scott has signed into law legislation aimed at enhancing the state’s captive insurance statute, according to a press release by the Vermont Captive Insurance Association (VCIA).

The measure, H.659, seeks to streamline regulatory practices, eliminate redundancies, and align requirements with the captive insurance market.

The annual legislative update, a collaboration between VCIA and the Vermont Department of Financial Regulation (DFR), introduces several key changes. Notably, it allows for the conversion of captive insurance companies into protected cells, amends language for parametric contracts to accommodate different structures, and lowers minimum statutory requirements for agency-type captive insurance companies.

The latter change reduces the minimum capital for an agency captive to $250,000 from $500,000, a change that aligns with the current captive insurance marketplace without compromising the expectations of captive insurance companies, VCIA stated.

Governor Scott emphasized the importance of the yearly captive bill in improving the quality of regulation. He said, “Vermont has a strong foundation of regulators and service providers who work together to ensure our state is as supportive as possible for Vermont’s captive insurance companies.”

The legislation also addresses statutory redundancies, particularly those related to confidentiality requirements. It builds on the 2022 amendment that allowed captive insurance companies to enter into parametric contracts for transferring risks, which have proven useful in managing risks associated with increased natural disasters, the VCIA noted.

The DFR, which monitors the financial health and solvency of captive insurance companies, has determined that the changes do not pose a risk to solvency.

“Captive insurance companies are regulated based on their individual risk profile and our robust regulatory team is skilled at understanding appropriate capital to match the unique risk,” said Sandy Bigglestone, deputy commissioner of the captive insurance division for the State of Vermont.

VCIA President Kevin Mead praised the openness of Vermont’s regulators and legislature to new ideas and feedback. Brittany Nevins, captive insurance economic development director at the Vermont Department of Economic Development, echoed this sentiment, stating that the annual process ensures Vermont continues to regulate captive insurance companies as effectively as possible. &

The post Vermont Updates Captive Insurance Law, Seeks to Streamline Regulatory Practices appeared first on Risk & Insurance.

Meet with Apollo Dealer Services

Chat with us virtually or in person.