Vermont Governor Phil Scott signs House Bill 649 (H.649) into law, reaffirming the state's commitment to its captive insurance industry through enhanced regulatory clarity and strengthened oversight provisions. The legislation, passed by the Vermont General Assembly on 12 March and signed on 24 March, takes effect on 1 July 2026. "Vermont continues to have a very strong captive insurance industry," says Governor Scott. "This year's updates keep with our practice of working together with regulators and industry leaders to maintain our framework which is strong, competitive, and responsive to evolving risks." Under H.649, risk retention groups (RRGs) are prohibited from making loans to or investments in their own members or the affiliates of those members. The Vermont Department of Financial Regulation (DFR) describes this as a codification of longstanding regulatory practice designed to ensure premium and surplus funds remain available to pay member claims and to avoid conflicts of interest. A grandfather clause exempts any loan or investment arrangement already in place before 1 January 2026. The act also codifies the requirement for RRGs to file quarterly financial statements with the National Association of Insurance Commissioners (NAIC), formalising existing practice in accordance with NAIC standards. Annual and quarterly statements must be submitted electronically. Quarterly filings are due on 15 May, 15 August, and 15 November each year. Further oversight is introduced for sponsored captive insurance companies through a new certification requirement for protected cells. Within 30 days of commencing business, each cell must file a statement under oath or affirmation with the Commissioner, certifying that it possessed the requisite funding and any required collateral before beginning operations. The DFR says this aligns requirements for protected cells with those already applicable to licensed captive insurers, reflecting their increasing role in risk financing and risk retention. Christine Brown, Deputy Commissioner of Captive Insurance at the DFR, says: "This bill demonstrates both the strength of Vermont's laws and our commitment to continually enhancing them. H.649 advances our strong foundation, ensuring alignment with evolving risks and industry best practices." Brittany Nevins, Captive Insurance Economic Development Director at the Vermont Department of Economic Development, says: "Vermont's approach to captive regulation is rooted in expertise and responsiveness. The updates included in H.649 reflect ongoing collaboration with industry and ensure that our regulatory framework continues to adapt to emerging risks while preserving the stability and integrity that captives depend on." Vermont remains widely recognised as a leading captive insurance domicile, with more than 1,400 licensed captives and decades of regulatory leadership.
