The Vermont Department of Financial Regulation (DFR) is preparing to launch a pilot program that will allow new captive insurance companies to register with the Secretary of State using blockchain technology.
Secretary of State Jim Condos and DFR Commissioner Michael Pieciak signed a memorandum of understanding on January 9, 2019 that outlined their collaborative efforts to explore the potential of blockchain in digital recordkeeping practices in the captive industry.
They later issued a request for information to identify vendors that can work with the state to develop the program, which is designed to test the functionality of the technology in state regulatory processes.
The pilot will also include a review and revision of relevant statutes, rules, regulations, and bulletins to ease blockchain implementation.
“Developments in technology provide opportunities for government to improve efficiency and transparency, cut red tape, and improve services for Vermonters,” said Secretary Condos.
“This pilot will allow us to examine whether or not the application of blockchain technology for digital recordkeeping can improve aspects of the state regulatory process,” he added.
Commissioner Pieciak also commented: “Financial services firms are innovating at lightning speed and regulators have an obligation to keep up.
“This partnership with the Secretary of State provides a great opportunity for our teams to become better acquainted with distributed ledger technology and understand how the state and Vermont businesses might benefit.”
Vermont is currently the global leader in captive insurance premium written and third in the world by active licenses.
“Vermont has long been known as an international leader in the captive insurance industry with a robust regulatory and professional community and a willingness to embrace innovation,” said Captive Insurance Deputy Commissioner David Provost. “This makes Vermont’s captive insurance industry the ideal place to pilot this blockchain program.”
The pilot program is expected to help the state identify areas where the use of blockchain technology in regulatory and other government business may increase data security and reduce costs for residents and those doing business in Vermont.
