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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

A FREE 12-page special report from Captive.com

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance explores the challenges presented by today's business and economic upheaval, as well as the hardening insurance market, and what it means for the captive insurance industry.

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Vermont Enacts Captive Statute Revisions

Vermont State Capitol
May 07, 2015

Vermont Governor Peter Shumlin on May 7 was expected to sign new captive legislation, the most significant groundbreaking change of which is to allow marketable securities along with cash, trusts, and letters of credit to meet the minimum capital requirement.

Here is a summary of the key provisions of the Act (S. 98).

  • Number of Incorporators--The number of incorporators was reduced from three to one to be consistent with most other incorporations under Vermont law.

  • Cell Companies Capital Requirements--The change reduces the minimum capital requirement from $500,000 to $250,000 for cell captive companies.

  • Structure on Capital Requirement for all Captive Companies--The new law allows captives to have greater flexibility with their required minimum capital to now include marketable securities along with allowing cash, trust, and letters of credit to meet the minimum capital requirement. The Vermont Department of Financial Regulation will issue further guidance to define “marketable securities.”

  • Definitions and Protected Cells--The law amends the sponsored cell law to make it easier to read by moving sections of the law to improve clarity.

  • Naming Conventions for Incorporated Cells--The law adds a requirement that incorporated protected cells have their own distinct names and designations, which in the case of incorporated protected cells should include the words "Incorporated Cell" or the abbreviation "IC."

  • Delinquency of Sponsored Captives and Adoption of the NAIC Protected Cell Company Model Act--Vermont now adopts portions of the National Association of Insurance Commissioners (NAIC) Protected Cell Company Model Act language regarding the segregation of assets and liabilities, contracting by/for individual cells, treatment of cells in case of delinquency, and the reach of creditors.

  • RRG Governance--Vermont now adopts the NAIC Model Governance Standards for Risk Retention Groups.

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