Senate committee outlines H.649 changes to captive insurance; orders bill for third reading

The Senate took up H.649 on second reading and ordered the bill for a third reading after a report from the Finance Committee.

The committee report, presented by Senator Chittton, summarized the bill’s three sections. He said the bill “pertains to captive insurance” and that sections one and two focus on risk retention groups. Section one would bar a risk retention group from lending to or investing in its members or affiliates, with a grandfather clause that preserves any loan or investment in effect before Jan. 1, 2026. The committee explained the restriction aims to “protect against potential conflicts of interest, preserve the financial integrity and solvency of the group, safeguard policyholder funds, and ensure there’s sufficient capital to cover future claims.”

Section two would require risk retention groups to file annual and quarterly statements in the National Association of Insurance Commissioners (NAIC) reporting format and to include a signed DR page and actuarial certification; the change codifies the Department of Financial Regulation’s current practice and makes certain regulatory filings nonconfidential for sharing with the NAIC. Section three would require each protected cell of a sponsored captive to file, within 30 days of commencing business, a sworn statement confirming it possessed requisite funding and any required collateral before beginning operations; the statements must be signed by designated corporate officers or authorized board members, depending on organization.

The bill would give the Commissioner of Financial Regulation rulemaking authority to adopt additional filing requirements for risk retention groups and sets an effective date of July 1, 2026. The Finance Committee said the amendments reflect a proposal recommended by the Commissioner of Financial Regulation and noted that loans or investments already approved before Jan. 1, 2026, would not be affected.

Senator Chittton closed the committee report by naming witnesses who testified to the committee, including Christine Brown (Deputy Commissioner of Captive Insurance, Department of Financial Regulation) and Ian Davis (President, Vermont Captive Insurance Association). The Senate then voted by voice to order the bill for third reading.

The chamber did not record a roll-call tally on the floor for the order to third reading; the presiding officer announced the question was agreed to and the order for third reading was entered. The bill will return for third reading under the Senate’s calendar process.