And We Are Off!

This slideshow requires JavaScript.

Thanks to all of you who joined us for another successful VCIA Legislative Day this week at Vermont’s State House in bustling Montpelier! Our members, including many who came from afar, got to hear from Vermont’s new Secretary of Commerce Lindsay Kurrle, as well as Vermont’s Commissioner of Financial Regulation Mike Pieciak during our luncheon. Later in the day our members met and heard from Vermont’s Lt. Gov. David Zuckerman, speaker of the House Mitzi Johnson, and House Minority Leader Patty McCoy. Although these dignitaries represent different parties under the Gold Dome, what they do have in common is their unwavering support of the captive insurance industry in Vermont.

At our luncheon, special guest economist Jeff Carr unveiled a recently completed economic contribution study of the captive insurance industry in Vermont. Suffice it to say that this industry is a tiny powerhouse here in Vermont! Immediately following, the folks from DFR provided a Q & A session for our members on recent updates and activities at the department. We provided a live stream via Facebook for our members.

In the afternoon, we testified before the House Commerce Committee, where Vermont’s Director of Financial Services, Ian Davis, and I gave updates on VCIA and the state of the industry. New VCIA Board Member, Tracy Hassett, President of EdHealth, did a terrific job describing her organization and the reasons they formed a captive in Vermont. In Senate Finance, Ian and I repeated our testimony and Deputy Commissioner Dave Provost concluded with a review of this year’s captive bill, S-255.

The great news is that the following day, Senate Finance voted out the bill 7-0 clearing the first hurdle in the legislative process. There are several sections of the bill, including lowering the minimum capital for sponsored captives from $250,000 to $100,000. The bill also proposes to expand to sponsored cell captives what we passed last year to all captives: provide flexibility in investments by giving companies the option to follow the old rules or develop a plan for DFR approval. Finally, the bill proposes to clarify disclosure requirements for agency captives – we may have been too prescriptive in the disclosure requirement built into the statute when passed last year.

Please click here to access a copy of the bill.

Thank you again to all of you who participated, and I look forward to hearing from you!

Rich Smith
VCIA President

Playing Well in the Insurtech Sandbox

Concept of Insurance policyLegislation to enable insurtech experimentation and innovation in Vermont is on its way to the Governor’s desk for his signature. In the next week or so, Governor Phil Scott is expected to sign the insurance and securities bill (S-131).  Among other things, this bill creates an insurtech “sandbox” which will allow more R&D in this area with specific guidelines. It also updates Vermont’s surplus lines laws.

The regulatory sandbox in S-131 will provide the flexibility necessary to accommodate new concepts at the same speed as insurance technology develops. It does so by lowering or eliminating the hurdles facing this sector in bringing developments to market amid an insurance regulatory landscape that does not always accommodate such development. Not everyone will be able to play in the sandbox environment, as eligibility criteria limits the number of clients and a limited time period for the developers is part of the package. Overall, though, it’s a great step forward.

Earlier this year, Commissioner of Financial Regulation Mike Pieciak and Secretary of State Jim Condos signed a memorandum of understanding outlining their collaborative efforts to explore emerging blockchain technology and its use in the digital recordkeeping practices of the captive insurance industry.  They jointly issued a Request for Information (RFI) to identify vendors that may work with the State to launch a pilot program allowing new captive insurance companies to register with the Secretary of State using blockchain technology.  The pilot program will 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.  There were more than 20 submissions which the department is currently reviewing.

The support of the insurtech sector and the blockchain pilot program are great examples of Vermont’s openness to technology trials and innovations in our State, and Vermont’s awareness that the insurance industry as a whole is ripe for innovation.

Thank you all very much, and I look forward to hearing from you!

Rich Smith
VCIA President