House advances captive-insurance statutory cleanup, lowers agency-captive capital requirement

The Vermont House on the floor advanced H.659, a bill offered by the Department of Financial Regulation to update the state’s captive insurance statutes, accepting committee amendments and ordering the bill for third reading.

The bill’s sponsor and committee spokesperson said the bill is largely technical and intended to align statute with current regulatory practice. Representative White (member from Bethel) told colleagues that Vermont’s captive industry brings in roughly $31,700,000 in revenue and supports “400 plus high-paying industry jobs,” and described provisions that would clarify definitions for sponsored captives, add a definition for a controlled unaffiliated entity and allow conversions to a protected-cell structure subject to the Commissioner’s approval.

The bill would also remove a definition of a “parametric contract” introduced in 2022 after regulators observed that some such arrangements can be structured as insurance contracts. One notable change reduces the minimum capital and surplus requirement for an agency captive from $500,000 to $250,000; Representative White said the Department supports the change as consistent with market practice and said the Commissioner retains authority to set higher requirements if needed.

Committee amendments include a typographical correction and a change to the effective date of the act. The Committee on Commerce and Economic Development reported the bill favorably (committee vote reported as 9–02); the Joint Fiscal Office and Ways and Means told the floor the statutory changes have no fiscal impact because related fee restructuring has already been handled administratively.

The House voted by voice to accept the committee’s recommended amendments and then voted to read H.659 a third time; third reading was ordered.

The bill will return for a third reading on a future floor day where any further amendments or a final passage vote may occur.