The state of Vermont has passed a new bill in its captive insurance law, which has been signed in by governor Peter Shumlin.
Chief among the changes is the establishment of a dormant category, giving qualifying inactive captives the ability to retain their captive structures in the state in the event they restart to finance risk again.
Previously, these companies could only cease operations and surrender their license if they wanted to avoid maintaining significant surplus, paying the minimum premium tax and complying with several annual filing requirements.
“This is another example of how Vermont legislators and the industry work together to be proactive in this domicile,” commented Guy Ragosta, CEO and partner with JLT Towner Insurance Management.
“The establishment of a dormant captive status is a cost-saver for these entities. If they decide to reactivate their captives, they won’t have to start the licensing process from scratch.”
Dormant captives will be required to have $25,000 in capital and surplus, while continuing to file an annual report and annual license renewal fee. The other change involves reciprocal captive insurance companies.
The deputy commissioner of Vermont’s captive division, David Provost, said: “This legislation updates several components in our law to keep Vermont at the forefront of domiciles.”
“The updates to our reciprocal law will make it more attractive than ever for educational institutions, health care providers and other not-for-profit organisations to domicile in Vermont.”
