Most business and industry groups probably enter their state houses with a slight sense of dread. Trying to get state legislators to fully understand your particular industry, and then ask them to make changes to the state’s laws to support the industry can be a daunting task.
Here in Vermont, visiting the folks under the gold dome is actually a very rewarding experience. I went to testify this week in Vermont’s House Commerce Committee on this year’s captive bill. This is the penultimate step in a process that starts out in the fall with meetings and surveys of our members regarding changes they would like to see to Vermont’s captive statute to enhance and streamline captive regulation in the State. We then bring the list of ideas through an iterative process with Dave Provost and his team at the Department of Financial Regulation. Together, the administration and the association bring a bill to the legislature that has been thoroughly vetted, and thus makes its way straightforwardly though the chambers before getting to the Governor’s desk.
What makes Vermont unique in this instance is that the legislators all have a positive view of the captive industry in Vermont. It is wholly supported by the Governor, the regulators and all other policy makers in the State. So, when Dave Provost and I went into the Commerce Committee on Tuesday we didn’t have to make the case for the industry. We just had to review the changes we were proposing and answer very intelligent questions by a group of people who actually know what they are talking about! That doesn’t happen every day.
The bill itself makes a number of technical changes to clean-up and streamline some current statutory language and practices, including codifying governance standards for RRGs, but it also does a number of things we think will enhance Vermont as a captive domicile. It would reduce the capital requirements for cell company structures from $500K to $250K – Vermont’s higher minimum requirement stands out when comparing and choosing domiciles. The bill would also change the structure on capital requirements for all captive companies by allowing captives to include marketable securities along with cash, trust and letters of credit. This allows a captive to manage its liquidity needs effectively and gives Vermont an advantage in the captive field. If you are interested in seeing an official copy of the bill with the House amendments added to the original bill and highlighted in yellow, please click here.
Thank you all very much, and I look forward to hearing from you soon.