Vermont Governor Phil Scott signed a bill this past Wednesday that makes some tweaks to Vermont’s captive statutes.
Every year, without fail, VCIA works with our members and Vermont’s Department of Financial Regulation (DFR) to bring a consensus bill to the Vermont legislature that makes rational, sensible changes that allows our industry to thrive in this State.
Sure, some years there are some sexy items in the annual captive legislation, like the creation of dormant captives (slow down my heart!). However, the changes usually look at streamlining and clarifying the law to make it both easier to navigate the rules to the game and do the business of captives. This year was one of those years.
When starting a captive, there is a certain practical order to things, i.e., the captive needs to be incorporated before a license can be granted or needs a tax ID number before bank accounts can be opened. The new law will bring the statute in line with modern practices and procedures.
The act also reorders language regarding protected cells to make it easier to follow. Similarly, captive statute references the traditional insurance statutes when it comes to mergers and redomestications. With enough difference in the captive insurance merger and redomestication language, the new act creates a separate section within the captive statute.
Finally, the changes in Vermont law will make it easier for captives to merge, provided there is unanimous consent of the parties (shareholders, members, or policyholders).
There are a couple of tweaks, but like I said, there was nothing earth shattering in the new act. Just another piece of legislation advancing Vermont’s captive insurance industry.
Thank you and I look forward to seeing you soon.