Vermont has introduced a bill called the Vermont Legacy Insurance Management Act (LIMA), which has the potential to drive millions of dollars into the state’s economy.
The bill allows specialized Vermont-based insurance companies to acquire or unload closed blocks of non-admitted commercial insurance policies and reinsurance agreements— subject to fees and transfer taxes. The purchaser, or legacy insurance company, does so if it is able to manage the legacy liabilities more efficiently than the original insurance company.
In buying the block of policies, along with a proportion of the financial reserves the insurance company had set aside to cover risks, the legacy firm manages any claims that might come through, and invests the reserves in order to turn a profit.
As LIMA covers only commercial insurance, no life, health, auto, homeowners' or workers' compensation, is included. The legacy companies must be based in Vermont and hold at least one meeting there every year.
