Vermont governor signs off on captive changesPosted On: Apr. 18, 2019 12:08 PM CST
Vermont Gov. Phil Scott signed legislation to modify the state’s captive examination schedule and regulations governing group captive investments, among other changes.
The new law will change the captive examination schedule from once every three years to “five years or more frequently as needed,” according to the statement released on Thursday.
“This will better reflect the state’s current practice of prioritizing examinations based on an assessment of the company’s risk,” Dave Provost, deputy commissioner of captive insurance, said in the statement. “I believe the captive industry will welcome this move, along with other updates included in the bill.”
Vermont’s new law also allows companies the ability to either adhere to current investment rules or develop their own plan for approval by the Department of Financial Regulation.
“For certain captives, the old law required companies to follow prescriptive, often strict investment statutes,” Ian Davis, director of financial services, said in the statement. “This move will allow Vermont statutes to keep pace with the rapid changes in the investment environment.”
Additional changes include clarifying the definition of an independent director, requiring National Association of Insurance Commissioners statutory accounting for affiliated reinsurance companies, and a specific inclusion of sole proprietorships among eligible businesses to be cell participants, according to the statement.
The bill also allows captives to now use any organizational form permitted by Vermont law, including sponsored cell captives and the incorporated cells within, ensuring the captive statute will automatically stay current when future changes occur, according to the statement.