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Vermont "Sticks to" and "Nurtures" Its Captive Insurance Plan

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August 10, 2017

On the morning of Wednesday, August 9, Rich Smith, the Vermont Captive Insurance Association (VCIA) president, welcomed US Representative Peter Welch and Governor Phil Scott to address Vermont Captive Insurance Conference attendees. 

Governor Scott noted that "real progress" was made in the last legislative session to further strengthen and support Vermont’s captive industry. He signed VCIA's captive bill (H.85) on May 1According to VCIA's Annual Impact Report for 2016, "the law added agency captives to the types of captives that can be formed in Vermont, which is a reinsurance company formed by an agency or brokerage. Agency captives create a long-term relationship between the agency and the insured, where interests are aligned: risk appetite, selection, pricing, loss control, claims management, etc. The bill also makes a number of technical amendments to continue to streamline Vermont's captive laws and regulations."

Congressman Welch explained that although Vermont is a small state (with a population of 625,000), it has a huge captive industry—one that supports $25 billion in premium and $192 billion in assets being managed around the world. He also noted that the domicile has 35 years of solid responsiveness and commitment to success based on two pillars: its statutes and its stable and flexible regulatory framework. Vermont productively amends and modernizes its captive laws to remain effective and responsive to competitive pressures. 

Congressman Welch reminded attendees that when Vermont passed its captive law in 1981, the state simply started out to set up a mechanism to create good insurance at a better price. By practicing cooperation instead of confrontation, Vermont has been able to stick to a plan that has crossed administrations over 35 years. The congressman stressed the importance and the duty of sticking to and nurturing the original plan, while recognizing that what you do today will be there for someone else to build on tomorrow. 

Watch for more VCIA 2017 Conference coverage.

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