Vermont Updates Captive Insurance Laws to Enhance Regulatory Framework

Vermont has enacted updates to its captive insurance laws through the 2025 housekeeping bill, H.137, signed into law on May 19, 2025. These amendments are part of Vermont's continuous effort to maintain its competitive edge in the captive insurance sector by modernizing its regulatory framework. Key changes include aligning captive licensing authority with broader state insurance statutes, clarifying signing authority in manager-managed LLCs, addressing mutual insurers, and updating governance language for captives involved in reinsurance.

Governor Phil Scott emphasized the importance of regularly updating captive insurance laws to keep Vermont competitive in the sector. The Vermont Department of Financial Regulation (DFR), led by Commissioner Kaj Samsom, highlighted the state's strong regulatory foundation and cooperation with industry stakeholders as critical factors in Vermont's leadership position globally within captive insurance.

The amendments reflect a collaborative process involving the Vermont Captive Insurance Association (VCIA) and state regulators, aiming to improve the operating environment for captive insurers domiciled in Vermont. This collaborative approach supports regulatory clarity and efficiency, enhancing the state’s attractiveness for captive insurance business.

The year 2025 also marks the 40th anniversary of the VCIA, which plays a significant role in the industry’s development and will commemorate its milestone at its Annual Conference in Burlington. Vermont’s ongoing refinements to captive insurance laws demonstrate its commitment to sustaining a robust and adaptive regulatory climate in line with industry needs and market trends.