Vermont Lawmakers Approve Bill Easing Reporting Requirements

Vermont lawmakers on May 6 gave final approval to legislation that will ease reporting requirements for new captive insurance companies.

Under S. 88, captives, before receiving a license, will have to file a copy of their organizational documents with the state insurance commissioner along with any other documents requested by the commissioner.

That is a change from current law under which captive insurance companies seeking to be licensed have to file a certified copy of organizational documents, as well as a statement submitted under oath by the captive's president and secretary showing its financial condition.

In addition, the measure makes clear that a new captive insurance company has 30 days after starting business to file a statement by its president and secretary that certifies the captive possessed required capital and surplus before it started operations.

The measure also clarifies that captives licensed elsewhere can redomesticate to Vermont by meeting all regulatory requirements, as well as by filing, among other things, certain organizational documents to the Vermont secretary of state.

"More than 100 captives have redomesticated to Vermont," Dave Provost, deputy commissioner of Vermont's captive insurance division in Montpelier, said earlier. "We want to simplify the process."

Vermont's captive association welcomes passage of the legislation. "I appreciate our legislators passing amendments to Vermont's captive law. Despite the pressures of COVID, legislators were willing to review and update the state's captive statute," said Richard Smith, president of the Vermont Captive Insurance Association in Burlington.

Currently, Vermont has 599 captives, making it, by far, the largest domestic domicile.