Saturday, June 10, 2023

Vermont governor signs new captive legislation, increases funding

Governor Phil Scott has signed Bill H.76 into law, which actions several updates to Vermont’s captive legislation, including refining the confidentiality of company information and increasing funding for the Vermont Captive Insurance Division.

The Bill was signed into law on 8 May.

“Vermont continues to be the worldwide leader in the captive insurance market, and this bill makes additional steps to enhance our strong reputation,” Scott said.

“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 aims to align the statute with the information collected when a new company applies for a licence.

It also updates the language for how the confidentiality of information collected is handled, 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 amends protected cell naming conventions to be inclusive of all allowable business type.

The legislation also included support for funding for the DFR captive insurance division to enable sustainable regulatory staffing and adequate resources to improve the environment captive insurance companies operate.

“Vermont is the gold standard when it comes to captive insurance regulation,” said Vermont deputy commissioner of captive insurance, Sandy Bigglestone.

“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.”

Vermont licensed 41 new captives in 2022 as it continues to benefit from a boom in captive business, largely driven by the hard insurance market.

There is more than $194bn in assets under management within the 639 captives domiciled in the state at the end of 2022, which write $30bn in annual premium.