Vermont Governor Signs Bill Updating State's Captive Statutes
May 22, 2023
Vermont Governor Phil Scott recently signed legislation making several updates to Vermont's captive insurance statutes, including improving the confidentiality of company information and increasing funding for the Vermont Captive Insurance Division's operations.
Bill H.76 included multiple updates that were made with captive industry input to clarify regulatory expectations and best practices.
"Vermont continues to be the worldwide leader in the captive insurance market, and this bill makes additional steps to enhance our strong reputation," Governor Scott said in a statement. "The hard work of the Vermont Department of Financial Regulation (DFR) and their partnerships in the industry ensure Vermont continues to see the significant economic benefits that come with our leadership in this sector."
The legislation aligns Vermont's captive statute with the information collected when a new company applies for a license. It updates the statute's language concerning the confidentiality of the information collected, extending such treatment to subsequent updates, approved amendments or revisions to a company's information, and its plan of operation.
Other sections of the bill include updates to references, the allowance of electronic records as an acceptable form of record retention, and an amendment of protected cell naming conventions to be inclusive of all allowable business types.
The legislation also includes support for an appropriate level of funding for the Vermont DFR's Captive Insurance Division to provide for sustainable regulatory staffing and adequate resources to improve the environment in which Vermont-domiciled captive insurance companies operate, without compromising standards.
"Vermont is the gold standard when it comes to captive insurance regulation," Vermont Deputy Commissioner of Captive Insurance Sandy Bigglestone said in the statement. "Captive owners have consistently communicated the need to operate in a jurisdiction with quality regulation because it adds value to their investment in managing their own risk and provides support for the captive operations of the organization."
"The benefits of the captive insurance industry to Vermont include significant tax and fee revenue that supports the state's essential programs, green job creation, and tourism revenue from business conducted in the state," Brittany Nevins, captive insurance economic development director in Vermont's Department of Economic Development, said in the statement. "It is necessary on occasion to invest in the program, so it continues to provide this great benefit to Vermonters and captive insurance companies alike."
Kevin Mead, president of the Vermont Captive Insurance Association (VCIA), cited Vermont lawmakers' continued willingness to work proactively to meet the needs of the state's captive industry.
"We are grateful to work once again with Vermont's regulators and lawmakers in improving the legislation to better reflect the changing needs of captive insurance companies and keep pace with the tremendous growth of this industry," Mr. Mead said in the statement. "What makes Vermont unique is its proactive approach to anticipated needs."
May 22, 2023