Vermont Governor, Phil Scott, has recently signed a new legislation making changes within its insurance and captive insurance statutes to help minimise the number of items before the legislature.
The bill makes several updates to Vermont’s captive law, including clarifying the ability for a cell to convert to another type of entity and simplifying processes around redomestication, mergers, and the filing of organisational documents prior to licensure.
Among the many updates included in this year’s captive bill, is the addition of language that allows for the conversion of a cell into another entity in accordance with Vermont’s corporation laws.
Additionally, mergers and redomestications have been historically referenced in the traditional insurance statute. Since mergers and redomestications occur with much greater frequency in captives, it made sense to have captive-specific sections within the captive statute.
The remaining changes corrected minor oversights in the 40-year-old bill, to ensure the law more accurately reflects the regulatory procedures.
Scott said: “Through the years, Vermont has remained proactive in modernising our laws to help the industry grow in the state.
“Vermont is a global leader in captive insurance and continues to collaborate with the sector to ensure we remain a top destination for companies looking to create captives.”
David Provost, Deputy Commissioner of Captive Insurance said: “Protected cells are a popular alternative risk transfer mechanism worldwide and are a growth area for the captive industry.
“The department has always liked the idea of cells as an incubator space for captive growth and wants to be sure it is easy for cells to convert to a standalone captive insurance company.”
Richard Smith, President of the Vermont Captive Insurance Association commented: “Vermont has seen a variety of redomestications, where a captive moves their captive from another state to Vermont, and Vermont has benefitted from this movement. We want to make this process and others as clear and simple as possible for companies.”
Brittany Nevins, Captive Insurance Economic Development Director added: “Every year Vermont looks not just at larger recommendations for improvement, but carefully considers all recommendations for improvement. This is part of what makes Vermont a consistent, trusted and effective domicile.”
