Title 08, Title 08: Banking and Insurance

§ 6005. Dividends No captive insurance company may pay a dividend out of, or other distribution with respect to, capital or surplus without the prior approval of the Commissioner. Approval of an ongoing plan for the payment of dividends or other distributions shall be conditioned…

§ 6006. Formation of captive insurance companies in this State (a) Subject to the approval of the Commissioner, a captive insurance company may be formed as any type of entity permissible under Vermont law. (b)-(c) [Repealed.] (d) A captive insurance company incorporated or organ…

§ 6006a. Mergers (a) Any captive insurance company meeting the qualifications set forth in subdivision 6006(j)(1) of this title may merge with any other insurer, whether licensed in this State or elsewhere, in the following manner: (1) The board of directors of each insurer shall…

§ 6006b. Redomestication (a) Any foreign or alien insurer that qualifies for licensure as a captive insurance company in this State may redomesticate to this State by complying with all of the requirements of law relative to the organization and licensing of a captive insurance c…

§ 6007. Reports and statements (a) Captive insurance companies shall not be required to make any annual report except as provided in this chapter. (b) Prior to March 1 of each year, and prior to March 15 of each year in the case of pure captive insurance companies, association ca…

§ 6008. Examinations and investigations (a) Whenever the Commissioner determines it to be prudent, but not less frequently than once every five years, the Commissioner shall personally, or by some competent person appointed by the Commissioner, inspect and examine each captive in…

§ 6009. Grounds and procedures for suspension or revocation of license (a) The license of a captive insurance company may be suspended or revoked by the Commissioner for any of the following reasons: (1) insolvency or impairment of capital or surplus; (2) failure to meet the requ…

§ 6010. Legal investments (a)(1) Except as may be otherwise authorized by the Commissioner, agency captive insurance companies, association captive insurance companies, sponsored captive insurance companies, protected cells in sponsored captive insurance companies, and risk reten…

§ 6011. Reinsurance (a) Any captive insurance company may provide reinsurance of policies approved by the Commissioner comprised in section 3301 of this title, on risks of its parent, affiliated companies, and controlled unaffiliated business ceded by any other insurer, and may p…

§ 6012. Rating organizations; memberships No captive insurance company shall be required to join a rating organization. (Added 1981, No. 28.)

§ 6013. Exemption from compulsory associations No captive insurance company shall be permitted to join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this State, nor shall any such captive insurance company, or any insured or affiliate…

§ 6014. Tax on premiums collected (a) Each captive insurance company shall pay to the Commissioner of Taxes on or before March 15 of each year a tax at the rate of 38-hundredths of one percent on the first 20 million dollars and 285-thousandths of one percent on the next 20 milli…

§ 6015. Rules and regulations The Commissioner may adopt and from time to time amend such rules relating to captive insurance companies as are necessary to enable the Commissioner to carry out the provisions of this chapter. (Added 1981, No. 28; amended 2003, No. 55, § 7.)

§ 6016. Laws applicable No provisions of this title, other than those contained in this chapter or contained in specific references contained in this chapter, shall apply to captive insurance companies. Risk retention groups shall have the privileges and be subject to the provisi…

§ 6017. Captive Insurance Regulatory and Supervision Fund (a)(1) There is hereby created a fund to be known as the Captive Insurance Regulatory and Supervision Fund for the purpose of providing the financial means for the Commissioner of Financial Regulation to administer this ch…

§ 6018. Delinquency Except as otherwise provided in this chapter, the terms and conditions set forth in chapter 145 of this title shall apply in full to captive insurance companies formed or licensed under this chapter; however, the assets of a separate account established under …

§ 6019. Rules for controlled unaffiliated business The Commissioner may adopt rules establishing standards to ensure that a parent or its affiliated company, or an industrial insured or its affiliated company, is able to exercise control of the risk management function of any con…

§ 6020. Conversion to or merger with reciprocal insurer (a) An association captive insurance company, risk retention group, industrial insured captive insurance company formed as a stock or mutual corporation, or other insurer approved by the Commissioner may be converted to or m…

§ 6024. Dormant captive insurance companies (a) As used in this section, unless the context requires otherwise, “dormant captive insurance company” means a captive insurance company that has: (1) ceased transacting the business of insurance, including the issuance of insurance po…

§ 6031. Formation (a) One or more sponsors may form a sponsored captive insurance company under this chapter. In addition to the general provisions of this chapter, the provisions of this subchapter shall apply to sponsored captive insurance companies. (b) Subject to the approval…

§ 6032. Definitions As used in this subchapter: (1) “General account” means all assets and liabilities of the sponsored captive insurance company not attributable to a protected cell. (2) “Incorporated protected cell” means a protected cell that, subject to the approval of the Co…

§ 6033. Supplemental application materials In addition to the information required by subdivisions 6002(c)(1) and (2) of this title, and subject to the confidentiality provisions of subdivision 6002(c)(3) of this title, each applicant-sponsored captive insurance company shall fil…

§ 6034. Protected cells A sponsored captive insurance company formed or licensed under the provisions of this chapter may establish and maintain one or more protected cells to insure risks of one or more participants or, subject to Commissioner approval, other parties unaffiliate…

§ 6034a. Incorporated protected cells (a) A protected cell of a sponsored captive insurance company may be formed as an incorporated protected cell as defined in subdivision 6032(2) of this title. (b) Subject to the prior written approval of the sponsored captive insurance compan…

§ 6034b. Separate accounts of protected cells With the Commissioner’s prior written approval, a protected cell of a sponsored captive insurance company may establish one or more separate accounts and may allocate to them amounts to provide for the insurance of risks of one or mor…

§ 6034c. Protected cell conversion (a)(1) Subject to the prior written approval of the Commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cells or as otherwise permitted pursuant to a participation agreement and th…

§ 6034d. Sale, transfer, or assignment of protected cells (a) Subject to the prior written approval of the Commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cell or as otherwise permitted pursuant to a participati…

§ 6034f. Annual report; books and records (a) For purposes of subsection 6007(b) of this chapter: (1) Each sponsored captive insurance company shall annually file with the Commissioner such financial reports as the Commissioner requires, which shall include accounting statements …

§ 6034g. Confidentiality (a) Subdivision 6002(c)(3) and subsection 6008(c) of this title shall apply to all documents, materials, or other information, including confidential and privileged documents, examination reports, preliminary examination reports or results, working papers…

§ 6034h. Conversion into protected cell (a)(1) Subject to the prior written approval of the Commissioner, a captive insurance company domiciled in this State and organized as an agency captive insurance company, association captive insurance company, industrial insured captive in…

§ 6035. Qualification of sponsors A sponsor of a sponsored captive insurance company may be any person approved by the Commissioner in the exercise of his or her discretion, based on a determination that the approval of such person as a sponsor is consistent with the purposes of …

§ 6036. Participants in sponsored captive insurance companies (a) Associations, corporations, limited liability companies, partnerships, trusts, risk retention groups, sole proprietorships, and other business entities may be participants in any sponsored captive insurance company…

§ 6037. Investments by sponsored captive insurance companies and protected cells Notwithstanding the provisions of section 6034 of this title, the assets of two or more protected cells may be combined for purposes of investment, and such combination shall not be construed as defe…

§ 6038. Delinquency of sponsored captive insurance companies (a) Except as otherwise provided in this section, the provisions of chapter 145 of this title shall apply in full to a sponsored captive insurance company and to each of its protected cells. (b) Upon any order of superv…

§ 6039. Claimant recourse (a) Consistent with the provisions of this subchapter, a creditor of a sponsored captive insurance company shall have recourse against the assets attributable to a protected cell if, and only if it is a creditor of the protected cell. A creditor of a pro…

§ 6041. Establishment of a branch captive insurance company (a) A branch captive insurance company may be established in this State in accordance with the provisions of this chapter, including subdivision 6002(c)(3) of this chapter. In addition to the general provisions of this c…

§ 6042. Definitions As used in this subchapter, unless the context requires otherwise: (1) “Alien captive insurance company” means any insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of an alien jurisdiction th…

[Section 6043 shall apply only to branch captive companies formed on and after January 1, 2009.] § 6043. Security required (a) No branch captive insurance company shall be issued a license unless it shall possess and thereafter maintain, as security for the payment of liabilities…

§ 6045. Branch captive reports Prior to March 15 of each year, or with the approval of the Commissioner within 75 days after its fiscal year-end, a branch captive insurance company shall file with the Commissioner a copy of all reports and statements required to be filed under th…

§ 6046. Examination of branch captives (a) The examination of a branch captive insurance company pursuant to section 6008 of this title shall be of branch business and branch operations only, so long as the branch captive insurance company provides annually to the Commissioner a …

§ 6047. Taxation of branch captives In the case of a branch captive insurance company, the tax provided for in section 6014 of this title shall apply only to the branch business of such company. (Added 2003, No. 55, § 9.)

§ 6047a. Confidentiality (a) Subdivision 6002(c)(3) and subsection 6008(c) of this title shall apply to all documents, materials, or other information, including confidential and privileged documents, examination reports, preliminary examination reports or results, working papers…

§ 6048a. Applicable law (a) A special purpose financial insurance company shall be subject to the provisions of this subchapter and to the provisions of subchapter 1 of this chapter. In the event of any conflict between the provisions of this subchapter and the provisions of subc…

§ 6048b. Existing licenses Except as otherwise determined by the Commissioner, a captive insurance company that has been licensed by the Commissioner pursuant to this chapter as of July 1, 2007 and that is engaged in or that will be engaged in an insurance securitization shall be…

§ 6048c. Definitions As used in this subchapter: (1) “Ceding insurer” means an insurance company approved by the Commissioner and licensed or otherwise authorized to transact the business of insurance or reinsurance in its state or country of domicile, which cedes risk to a speci…

§ 6048d. Licensing; authority (a) A special purpose financial insurance company may reinsure the risks of a ceding insurer only. A special purpose financial insurance company may purchase reinsurance to cede the risks assumed under a reinsurance contract, subject to the prior app…