Vermont Governor Signs Captive Insurance Law Changes

June 6, 2008

Governor Jim Douglas has signed into law a bill making changes
to Vermont’s banking and insurance laws, including provisions for streamlining and growing the state’s captive insurance industry.

The bill also includes measures designed to protect consumers by enabling Vermont to join a national licensing system for mortgage brokers and non-bank lenders.

“Through a collection of thoughtfully rendered statutory changes, this legislation ties together numerous diverse benefits to both consumers and Vermont’s financial services industries, particularly our captive insurance sector,” said Gov. Douglas at a signing ceremony at Dwight Asset Management, LLC, in Burlington.

Changes are aimed at streamlining the process for merging captive insurance companies and enhancing the laws for “special purpose financial captives” enacted last year.

A captive insurer is a company that is owned or controlled by its policyholders.

Captive insurance generates millions of dollars in premium taxes to the general fund, according to Banking, Insurance, Securities & Health Care Administration Commissioner Paulette Thabault.

“Through this bill, Vermont continues to polish its ‘gold standard’ regulatory system to ensure the solvency of captives, while recognizing the special purposes for which they were formed,” Thabault said.

The bill also cracks down on unlicensed companies or individuals selling illegal or misleading insurance products to Vermonters; eliminates duplication in the oversight of educational loans, and brings verification of credit union member accounts in line with
national standards.

Source: Vermont BISHCA

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