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Vermont House Bill H0137

Vermont 2025-2026 Regular Session

Vermont House Bill H0137 Compare Versions

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1-BILLASPASSEDBYTHEHOUSE H.137
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3-H.137
4-IntroducedbyRepresentativesMarcotteofCoventry,BoschofClarendon,
5-Carris-DuncanofWhitingham,CooperofPownal,Dukeof
6-Burlington,GraningofJericho,MicklusofMilton,Olsonof
7-Starksboro,andWhiteofBethel
8-ReferredtoCommitteeon
9-Date:
10-Subject:Insurance;captiveinsurance;propertyandcasualty;regulation
11-Statementofpurposeofbillasintroduced:Thisbillproposestomakevarious
12-amendmentstoVermontlawprimarilyasitpertainstotheregulationof
13-insuranceproductsandservicessubjecttothejurisdictionoftheDepartmentof
14-FinancialRegulation.
15-Anactrelatingtotheregulationofinsuranceproductsandservices
16-ItisherebyenactedbytheGeneralAssemblyoftheStateofVermont:
17-Sec.1.8V.S.A.§ 23isamendedtoread:
18-§23.CONFIDENTIALITYOFINVESTIGATIONANDEXAMINATION
19-REPORTS
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38-(a)Thissectionshallapplytoallpersonslicensed,authorized,or
39-registered,orrequiredtobelicensed,authorized,orregistered,underthistitle
40-orunder9V.S.A.chapter150bytheCommissioner.
41-(b)Regardlessofsource,allrecordsofinvestigations,including
42-informationpertainingtoacomplaintbyorforaconsumer,andallrecordsand
43-reportsofexaminationsbytheCommissioner,whetherinthepossessionofa
44-supervisoryagencyoranotherperson,shallbeconfidentialandprivileged,
45-shallnotbemadepublic,andshallnotbesubjecttodiscoveryorintroduction
46-intoevidenceinanyprivatecivilaction.Nopersonwhoparticipatedonbehalf
47-oftheCommissionerinaninvestigationorexaminationshallbepermittedor
48-requiredtotestifyinanysuchcivilactionastoanyfindings,
49-recommendations,opinions,results,orotheractionsrelatingtothe
50-investigationorexamination.
51-(c)TheCommissionermay,inhisorhertheCommissioner’sdiscretion,
52-discloseorpublishorauthorizethedisclosureorpublicationofanysuch
53-recordorreportoranypartthereofinthefurtheranceoflegalorregulatory
54-proceedingsbroughtasapartoftheCommissioner’sofficialduties.The
55-Commissionermay,inhisorhertheCommissioner’sdiscretion,discloseor
56-publishorauthorizethedisclosureorpublicationofanysuchrecordorreport
57-oranypartthereof,tocivilorcriminallawenforcementauthoritiesforusein
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79-theexerciseofsuchauthority’sduties,insuchmannerastheCommissioner
80-maydeemproper.
81-(d)Forthepurposesofthissection,recordsofinvestigationsandrecords
82-andreportsofexaminationsshallincludejointexaminationsbythe
83-Commissionerandanyothersupervisoryagency.Recordsofinvestigations
84-andreportsofexaminationsshallalsoincluderecordsofexaminationsand
85-investigationsconductedby:
86-(1)anyagencywithsupervisoryjurisdictionovertheperson;and
87-(2)anyagencyofanyforeigngovernmentwithsupervisoryjurisdiction
88-overanypersonsubjecttothejurisdictionoftheDepartment,whensuch
89-recordsareconsideredconfidentialbysuchagencyorforeigngovernmentand
90-therecordsareinthepossessionoftheCommissioner.
91-Sec.2.8V.S.A.§ 3303isamendedtoread:
92-§3303.MUTUALCOMPANIES;DIRECTORS,CHARTERPROVISIONS
93-ASTO
94-Thearticlesofassociationorbylawsofamutualinsurershallsetforththe
95-mannerinwhichitsboardofdirectorsorothergoverningbodyshallbe
96-elected,andinwhichmeetingsofpolicyholdersshallbecalled,held,and
97-conducted,subjecttosuchproceduresasmayberequiredbythe
98-Commissionerundersection75subsection15(a)ofthistitle.
99-Sec.3.8V.S.A.§ 4688(a)isamendedtoread:
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122-(a)Filingsastocompetitivemarkets.Exceptwithrespecttofilings
123-submittedpursuanttosection4687ofthistitle,inacompetitivemarket,every
124-insurershallfilewiththeCommissionerallratesandsupplementaryrate
125-information,andsupportinginformationthataretobeusedinthisState,
126-providedthatsuchratesandinformationneednotbefiledforspecificallyrated
127-inlandmarinerisksorsuchotherrisksthataredesignatedbyregulationofthe
128-Commissionerasnotrequiringafiling.Suchrates,supplementaryrate
129-information,andsupportinginformationshallbeprovidedtothe
130-Commissionernotlaterthan15daysafter30dayspriortotheeffectivedate.
131-Aninsurermayadoptbyreference,withorwithoutdeviationormodification,
132-providedthatsaiddeviationormodificationisreadilyidentifiable,therates,
133-supplementaryrateinformation,andsupportinginformationfiledbyanother
134-insureroranadvisoryorserviceorganizationwithwhichitisaffiliated;
135-provided,however,suchanadoptionshallnotrelieveaninsurerfromany
136-otherrequirementsofthischapter.
137-Sec.4.8V.S.A.§ 4685aisaddedtoread:
138-§ 4685a.AFFORDABLEHOUSINGINSURANCE;UNFAIR
139-DISCRIMINATION
140-(a)AninsurerthatissuesordeliversinthisStateapolicyofinsurance
141-coveringlossofordamagetorealpropertycontainingunitsforresidential
142-purposesorlegalliabilityofanownerorrenterofsuchrealpropertyshallnot
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165-inquireaboutonanapplication,norshallaninsurercancel,refusetoissue,
166-refusetorenew,orincreasethepremiumofapolicy,orexclude,limit,restrict,
167-orreducecoverageunderapolicybasedon,thefollowing:
168-(1)whethertheresidentialbuildingcontainsdwellingunitsthatare
169-requiredtobeaffordabletoresidentsataspecificincomelevelpursuanttoa
170-statute,regulation,restrictivedeclaration,orregulatoryagreementwithalocal,
171-State,orfederalgovernmententity;
172-(2)whethertherealpropertyownerortenantsofsuchresidential
173-buildingortheshareholdersofacooperativehousingcorporationreceive
174-rentalassistanceprovidedbyalocal,State,orfederalgovernmententity,
175-includingthereceiptoffederalvouchersissuedunderSection8oftheU.S.
176-HousingActof1937,42 U.S.C.§ 1437f;
177-(3)thelevelorsourceofincomeofthetenantsoftheresidential
178-buildingortheshareholdersofacooperativehousingcorporation;or
179-(4)whethertheresidentialbuildingisownedbyalimited-equity
180-cooperative,publichousingagency,orcooperativehousingcorporation.
181-(b)Nothinginthissectionshallprohibitaninsurerfromcancelling,
182-refusingtoissue,refusingtorenew,orincreasingthepremiumofaninsurance
183-policy,orexcluding,limiting,restricting,orreducingcoverageunderapolicy,
184-duetootherfactorsthatarepermittedornotprohibitedbyanyothersectionof
185-thischapter.
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208-Sec.5.8V.S.A.§ 6002(a)isamendedtoread:
209-(a)Anycaptiveinsurancecompany,whenpermittedbyitsarticlesof
210-association,charter,orotherorganizationaldocument,mayapplytothe
211-Commissionerforalicensetodoanyandallconductinsurancebusiness
212-comprisedinsubdivisions3301(a)(1),(2),(3)(A)-(C),(E)-(Q),and(4)-(9)
213-section3301ofthistitleandmaygrantannuitycontractsasdefinedinsection
214-3717ofthistitleandmayacceptortransferriskbymeansofaparametric
215-contract;provided,however,that:
216-(1)Nopurecaptiveinsurancecompanymayinsureanyrisksotherthan
217-thoseofitsparentandaffiliatedcompaniesorcontrolledunaffiliatedbusiness.
218-(2)Noagencycaptiveinsurancecompanymaydoanyinsurance
219-businessinthisStateunless:
220-(A)aninsuranceagencyorbrokeragethatownsorcontrolsthe
221-agencycaptiveinsurancecompanyremainsinregulatorygoodstandinginall
222-statesinwhichitislicensed;
223-(B)itinsuresonlytherisksofthecommercialpoliciesthatareplaced
224-byorthroughaninsuranceagencyorbrokeragethatownsordirectlyor
225-indirectlycontrolstheagencycaptiveinsurancecompanyand,ifrequiredby
226-theCommissionerinhisorhertheCommissioner’sdiscretion,itprovidesthe
227-Commissionertheformofsuchcommercialpolicies;
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249-(C)itdisclosestotheoriginalpolicyholderorpolicyholders,ina
250-formormannerapprovedbytheCommissioner,thattheagencycaptive
251-insurancecompanyasaresultofitsaffiliationwithaninsuranceagencyor
252-brokeragemayenterintoareinsuranceorotherrisk-sharingagreementwith
253-theagencyorbrokerage;and
254-(D)ifrequiredbytheCommissionerinhisorherthe
255-Commissioner’sdiscretion,thebusinesswrittenbyanagencycaptive
256-insurancecompanyis:
257-(i)Frontedbyaninsurancecompanylicensedunderthelawsof
258-anystate.
259-(ii)ReinsuredbyareinsurerauthorizedorapprovedbytheState
260-ofVermont.
261-(iii)SecuredbyatrustfundintheUnitedStatesforthebenefitof
262-policyholdersandclaimantsorfundedbyanirrevocableletterofcreditor
263-otherarrangementthatisacceptabletotheCommissioner.TheCommissioner
264-mayrequiretheagencycaptiveinsurancecompanytoincreasethefundingof
265-anysecurityarrangementestablishedunderthissubdivision.Iftheformof
266-securityisaletterofcredit,theletterofcreditshallbeissuedorconfirmedby
267-abankapprovedbytheCommissioner.Atrustmaintainedpursuanttothis
268-subdivisionshallbeestablishedinaformandupontermsapprovedbythe
269-Commissioner.
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292-(3)Noassociationcaptiveinsurancecompanymayinsureanyrisks
293-otherthanthoseofitsassociation,thoseofthememberorganizationsofits
294-association,andthoseofamemberorganization’saffiliatedcompanies.
295-(4)Noindustrialinsuredcaptiveinsurancecompanymayinsureany
296-risksotherthanthoseoftheindustrialinsuredsthatcomprisetheindustrial
297-insuredgroup,thoseoftheiraffiliatedcompanies,andthoseofthecontrolled
298-unaffiliatedbusinessofanindustrialinsuredoritsaffiliatedcompanies.
299-(5)Noriskretentiongroupmayinsureanyrisksotherthanthoseofits
300-membersandowners.
301-(6)Nocaptiveinsurancecompanymayprovidepersonalmotorvehicle
302-orhomeowner’sinsurancecoverageoranycomponentthereof.
303-(7)Nocaptiveinsurancecompanymayacceptorcedereinsurance
304-exceptasprovidedinsection6011ofthistitle.
305-(8)Anycaptiveinsurancecompanymayprovideexcessworkers’
306-compensationinsurancetoitsparentandaffiliatedcompanies,unless
307-prohibitedbythefederallaworlawsofthestatehavingjurisdictionoverthe
308-transaction.Anycaptiveinsurancecompany,unlessprohibitedbyfederallaw,
309-mayreinsureworkers’compensationofaqualifiedself-insuredplanofits
310-parentandaffiliatedcompanies.
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331-(9)Anycaptiveinsurancecompanythatinsuresrisksdescribedin
332-subdivisions3301(a)(1)and(2)ofthistitleshallcomplywithallapplicable
333-Stateandfederallaws.
334-(10)Anycaptiveinsurancecompanythattransfersriskbymeansofa
335-parametriccontractshallcomplywithallapplicableStateandfederallawsand
336-regulations.
337-Sec.6.8V.S.A.§ 6004(d)isamendedtoread:
338-(d)Within30daysaftercommencingbusiness,eachcaptiveinsurance
339-companyshallfilewiththeCommissionerastatementunderoathofits
340-presidentandsecretaryortwoindividualsauthorizedbythegoverningboard
341-certifyingthatthecaptiveinsurancecompanypossessedtherequisite
342-unimpaired,paid-incapitalandsurpluspriortocommencingbusiness.
343-Sec.7.8V.S.A.§ 6006isamendedtoread:
344-§6006.FORMATIONOFCAPTIVEINSURANCECOMPANIESINTHIS
345-STATE
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347-(h)Otherthancaptiveinsurancecompaniesformedaslimitedliability
348-companiesunder11V.S.A.chapter21chapter25orasnonprofitcorporations
349-underTitle11B,captiveinsurancecompaniesformedascorporationsunderthe
350-provisionsofthischaptershallhavetheprivilegesandbesubjecttothe
351-provisionsofTitle11Aaswellastheapplicableprovisionscontainedinthis
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374-chapter.Intheeventofconflictbetweentheprovisionsofsaidgeneral
375-corporationlawandtheprovisionsofthischapter,thelattershallcontrol.
376-(i)Captiveinsurancecompaniesformedundertheprovisionsofthis
377-chapter:
378-(1)Aslimitedliabilitycompaniesshallhavetheprivilegesandbe
379-subjecttotheprovisionsof11V.S.A.chapter21chapter25aswellasthe
380-applicableprovisionscontainedinthischapter.Intheeventofaconflict
381-betweentheprovisionsof11V.S.A.chapter21chapter25andtheprovisions
382-ofthischapter,thelattershallcontrol.
383-(2)Asnonprofitcorporationsshallhavetheprivilegesandbesubjectto
384-theprovisionsofTitle11Baswellastheapplicableprovisionscontainedin
385-thischapter.IntheeventofconflictbetweentheprovisionsofTitle11Band
386-theprovisionsofthischapter,thelattershallcontrol.
387-(3)Asmutualinsurersshallhavetheprivilegesandbesubjecttothe
388-provisionsofsections3303and3311ofthistitleaswellastheapplicable
389-provisionscontainedinthischapter.Intheeventofaconflictbetweenthe
390-provisionsofsections3303and3311ofthistitleandtheprovisionsofthis
391-chapter,thelattershallcontrol.
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412-Sec.8.8V.S.A.§ 6006a(a)isamendedtoread:
413-(a)Anycaptiveinsurancecompanymeetingthequalificationssetforthin
414-subdivision6006(j)(1)ofthistitlemaymergewithanyotherinsurer,whether
415-licensedinthisStateorelsewhere,inthefollowingmanner:
416-(1)Theboardofdirectorsofeachinsurershall,byaresolutionadopted
417-byamajorityvoteofthemembersofsuchboard,approveajointagreementof
418-mergersettingforth:
419-(A)thenamesoftheinsurersproposedtomerge,andthenameofthe
420-insurerintowhichtheyproposetomerge,whichishereafterdesignatedasthe
421-survivingcompany;
422-(B)thetermsandconditionsoftheproposedmergerandthemodeof
423-carryingthesameintoeffect;
424-(C)themannerandbasisofconvertingtheownershipinterests,if
425-applicable,inotherthanthesurvivinginsurerintoownershipinterestsorother
426-consideration,securities,orobligationsofthesurvivinginsurer;
427-(D)arestatementofsuchprovisionsofthearticlesofincorporation
428-ofthesurvivinginsurerasmaybedeemednecessaryoradvisabletogiveeffect
429-totheproposedmerger;and
430-(E)anyotherprovisionswithrespecttotheproposedmergerasare
431-deemednecessaryordesirable.
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454-(2)Theresolutionoftheboardofdirectorsofeachinsurerapproving
455-theagreementshalldirectthattheagreementbesubmittedtoavoteofthe
456-shareholders,members,orpolicyholders,asthecasemaybe,ofeachinsurer
457-entitledtovoteinrespectthereofatadesignatedmeetingthereof,orvia
458-unanimouswrittenconsentofsuchshareholders,members,orpolicyholdersin
459-lieuofameeting.Noticeofthemeetingshallbegivenasprovidedinthe
460-bylaws,charter,orarticlesofassociation,orothergovernancedocument,as
461-thecasemaybe,ofeachinsurerandshallspecificallyreflecttheagreementas
462-amattertobeconsideredatthemeeting.
463-(3)Theagreementofmergersoapprovedshallbesubmittedtoavoteof
464-theshareholders,members,orpolicyholders,asthecasemaybe,ofeach
465-insurerentitledtovoteinrespectthereofatthemeetingdirectedbythe
466-resolutionoftheboardofdirectorsofsuchcompanyapprovingtheagreement,
467-andtheagreementshallbeunanimouslyadoptedbytheshareholders,
468-members,orpolicyholders,asthecasemaybe.
469-(4)Followingtheadoptionoftheagreementbyanyinsurer,articlesof
470-mergershallbeadoptedinthefollowingmanner:
471-(A)Upontheexecutionoftheagreementofmergerbyallofthe
472-insurerspartiesthereto,thereshallbeexecutedandfiled,inthemanner
473-hereafterprovided,articlesofmergersettingforththeagreementofmerger,
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495-thesignaturesoftheseveralinsurerspartiesthereto,themannerofits
496-adoption,andthevotebywhichadoptedbyeachinsurer.
497-(B)Thearticlesofmergershallbesignedonbehalfofeachinsurer
498-byadulyauthorizedofficerorindividualauthorizedbythegoverningboard,
499-insuchmultiplecopiesasshallberequiredtoenabletheinsurerstocomply
500-withtheprovisionsofthissubchapterwithrespecttofilingandrecordingthe
501-articlesofmerger,andshallthenbepresentedtotheCommissioner.
502-(C)TheCommissionershallapprovethearticlesofmergerifheor
503-shetheCommissionerfindsthatthemergerwillpromotethegeneralgoodof
504-theStateinconformitywiththosestandardssetforthinsection3305ofthis
505-title.IfheorshetheCommissionerapprovesthearticlesofmerger,heorshe
506-theCommissionershallissueacertificateofapprovalofmerger.
507-(5)Theinsurershallfilethearticlesofmerger,accompaniedbythe
508-agreementofmergerandthecertificateofapprovalofmerger,withthe
509-SecretaryofStateandpayallfeesasrequiredbylaw.IftheSecretaryofState
510-findsthattheyconformtolaw,heorshetheSecretaryshallissueacertificate
511-ofmergerandreturnittothesurvivinginsureroritsrepresentatives.The
512-mergershalltakeeffectuponthefilingofarticlesofmergerwiththeSecretary
513-ofState,unlessalatereffectivedateisspecifiedtherein.
514-(6)Thesurvivinginsurershallfileacopyofthecertificateofmerger
515-fromtheSecretaryofStatewiththeCommissioner.
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538-Sec.9.8V.S.A.§ 6007(b)isamendedtoread:
539-(b)PriortoMarch1ofeachyear,andpriortoMarch15ofeachyearinthe
540-caseofpurecaptiveinsurancecompanies,associationcaptiveinsurance
541-companies,sponsoredcaptiveinsurancecompanies,industrialinsuredcaptive
542-insurancecompanies,oragencycaptiveinsurancecompanies,eachcaptive
543-insurancecompanyshallsubmittotheCommissionerareportofitsfinancial
544-condition,verifiedbyoathoftwoofitsexecutiveofficersortwoindividuals
545-authorizedbythegoverningboard.Eachcaptiveinsurancecompanyshall
546-reportusinggenerallyacceptedaccountingprinciples,statutoryaccounting
547-principles,orinternationalfinancialreportingstandardsunlessthe
548-Commissionerrequires,approves,oracceptstheuseofanyother
549-comprehensivebasisofaccounting,ineachcasewithanyappropriateor
550-necessarymodificationsoradaptationsthereofrequiredorapprovedor
551-acceptedbytheCommissionerforthetypeofinsuranceandkindsofinsurers
552-tobereportedupon,andassupplementedbyadditionalinformationrequired
553-bytheCommissioner.Asusedinthissection,statutoryaccountingprinciples
554-shallmeantheaccountingprinciplescodifiedintheNAICAccounting
555-PracticesandProceduresManual.Uponapplicationforadmission,acaptive
556-insurancecompanyshallselect,withexplanation,anaccountingmethodfor
557-reporting.Anychangeinacaptiveinsurancecompany’saccountingmethod
558-shallrequirepriorapproval.Exceptasotherwiseprovided,eachriskretention
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581-groupshallfileitsreportintheformrequiredbysubsection3561(a)ofthis
582-title,andeachriskretentiongroupshallcomplywiththerequirementssetforth
583-insection3569ofthistitle.TheCommissionershallbyruleproposethe
584-formsinwhichpurecaptiveinsurancecompanies,associationcaptive
585-insurancecompanies,sponsoredcaptiveinsurancecompanies,andindustrial
586-insuredcaptiveinsurancecompaniesshallreport.Subdivision6002(c)(3)of
587-thistitleshallapplytoeachreportfiledpursuanttothissection,exceptthat
588-suchsubdivisionshallnotapplytoreportsfiledbyriskretentiongroups.
589-Sec.10.8V.S.A.§ 6011(a)isamendedtoread:
590-(a)Anycaptiveinsurancecompanymayprovidereinsurance,ofpolicies
591-approvedbytheCommissionercomprisedinsubsection3301(a)section3301
592-ofthistitle,onrisksofitsparent,affiliatedcompanies,andcontrolled
593-unaffiliatedbusinesscededbyanyotherinsurer,andmayprovidereinsurance
594-ofannuitycontractsasdefinedinsection3717ofthistitlethataregrantedby
595-anyotherinsurer.
596-Sec.11.8V.S.A.§ 6024(c)isamendedtoread:
597-(c)Adormantcaptiveinsurancecompanythathasbeenissuedacertificate
598-ofdormancyshall:
599-(1)possessandthereaftermaintainunimpaired,paid-incapitaland
600-surplusofnotlessthan$25,000.00;provided,however,thatifthedormant
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622-captiveinsurancecompanyhadnevercapitalized,itshallnotberequiredto
623-addcapitaluponenteringdormancy;
624-(2)priortoMarch15ofeachyear,submittotheCommissionerareport
625-ofitsfinancialcondition,verifiedbyoathoftwoofitsexecutiveofficersor
626-individualsauthorizedbyitsgoverningboard,inaformasmaybeprescribed
627-bytheCommissioner;and
628-(3)payalicenserenewalfeeof$500.00.
629-Sec.12.8V.S.A.§ 6045isamendedtoread:
630-§6045.BRANCHCAPTIVEREPORTS
631-PriortoMarch15ofeachyear,orwiththeapprovaloftheCommissioner
632-within75daysafteritsfiscalyear-end,abranchcaptiveinsurancecompany
633-shallfilewiththeCommissioneracopyofallreportsandstatementsrequired
634-tobefiledunderthelawsofthejurisdictioninwhichthealiencaptive
635-insurancecompanyisformed,verifiedbyoathoftwoofitsexecutiveofficers
636-orindividualsauthorizedbythegoverningboard.IftheCommissioneris
637-satisfiedthattheannualreportfiledbythealiencaptiveinsurancecompanyin
638-itsdomiciliaryjurisdictionprovidesadequateinformationconcerningthe
639-financialconditionofthealiencaptiveinsurancecompany,theCommissioner
640-maywaivetherequirementforcompletionofthecaptiveannualstatementfor
641-businesswritteninthealienjurisdiction.
642-Sec.13.8V.S.A.§ 6048d(c)(2)isamendedtoread:
643-1
644-2
645-3
646-4
647-5
648-6
649-7
650-8
651-9
652-10
653-11
654-12
655-13
656-14
657-15
658-16
659-17
660-18
661-19
662-20
663-21 BILLASPASSEDBYTHEHOUSE H.137
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665-(2)Thespecialpurposefinancialinsurancecompanyshallsubmitan
666-affidavitofitspresident,avicepresident,thetreasurer,orthechieffinancial
667-officer,oranindividualauthorizedbythegoverningboardthatincludesthe
668-followingstatements,tothebestofsuchperson’sknowledgeandbeliefafter
669-reasonableinquiry:
670-(A)theproposedorganizationandoperationofthespecialpurpose
671-financialinsurancecompanycomplywithallapplicableprovisionsofthis
672-chapter;
673-(B)thespecialpurposefinancialinsurancecompany’sinvestment
674-policyreflectsandtakesintoaccounttheliquidityofassetsandthereasonable
675-preservation,administration,andmanagementofsuchassetswithrespectto
676-therisksassociatedwiththereinsurancecontractandtheinsurance
677-securitizationtransaction;and
678-(C)thereinsurancecontractandanyarrangementforsecuringthe
679-specialpurposefinancialinsurancecompany’sobligationsundersuch
680-reinsurancecontract,includinganyagreementsorotherdocumentationto
681-implementsucharrangement,complywiththeprovisionsofthissubchapter.
682-Sec.14.8V.S.A.§ 6052(g)isamendedtoread:
683-(g)Thissubsectionestablishesgovernancestandardsforariskretention
684-group.
685-(1)Asusedinthissubsection:
686-1
687-2
688-3
689-4
690-5
691-6
692-7
693-8
694-9
695-10
696-11
697-12
698-13
699-14
700-15
701-16
702-17
703-18
704-19
705-20
706-21 BILLASPASSEDBYTHEHOUSE H.137
707-2025 Page18of53
708-(A)“Boardofdirectors”or“board”meansthegoverningbodyofa
709-riskretentiongroupelectedbyriskretentiongroupmemberstoestablish
710-policy,electorappointofficersandcommittees,andmakeothergoverning
711-decisions.
712-(B)“Director”meansanaturalpersondesignatedinthearticlesof
713-theriskretentiongroupordesignated,elected,orappointedbyanyother
714-manner,name,ortitletoactasamemberofthegoverningbodyoftherisk
715-retentiongroup.
716-(C)(i)“Independentdirector”meansadirectorwhodoesnothavea
717-materialrelationshipwiththeriskretentiongroup.Adirectorhasamaterial
718-relationshipwithariskretentiongroupifheorshethedirector,oramember
719-ofhisorherthedirector’simmediatefamily:
720-(I)(i)Inany12-monthperiod,receivesfromtheriskretention
721-group,orfromaconsultantorserviceprovidertotheriskretentiongroup,
722-compensationorotheritemoritemsofvalueinanamountequaltoorgreater
723-thanfivepercentoftheriskretentiongroup’sgrosswrittenpremiumortwo
724-percentoftheriskretentiongroup’ssurplus,asmeasuredattheendofany
725-fiscalquarterfallinginsuch12-monthperiod,whicheverisgreater.This
726-provisionalsoappliestocompensationoritemsofvaluereceivedbyany
727-businesswithwhichthedirectorisaffiliated.Suchmaterialrelationshipshall
728-1
729-2
730-3
731-4
732-5
733-6
734-7
735-8
736-9
737-10
738-11
739-12
740-13
741-14
742-15
743-16
744-17
745-18
746-19
747-20 BILLASPASSEDBYTHEHOUSE H.137
748-2025 Page19of53
749-continueforoneyearafterreceiptoftheitemoritemsofvalueorthe
750-compensationfallsbelowthethresholdestablishedinthissubdivision.
751-(II)(ii)Hasarelationshipwithanauditorasfollows:Isaffiliated
752-withoremployedinaprofessionalcapacitybyacurrentorformerinternalor
753-externalauditoroftheriskretentiongroup.Suchmaterialrelationshipshall
754-continueforoneyearaftertheaffiliationoremploymentends.
755-(aa)(iii)Isemployedasanexecutiveofficerofanotherbusiness
756-entitythatisaffiliatedwiththeriskretentiongroupbyvirtueofcommon
757-ownershipandcontrol,ifsuchentitymeetsallofthefollowingcriteria:
758-(AA)(I)theentityisnotaninsuredoftheriskretentiongroup;
759-(BB)(II)theentityhasacontractualrelationshipwiththerisk
760-retentiongroup;and
761-(CC)(III)thegoverningboardoftheentityincludesexecutive
762-officersoftheriskretentiongroup,unlessamajorityofthemembershipof
763-suchentity’sgoverningboardiscomposedofindividualswhoaremembersof
764-thegoverningboardoftheriskretentiongroup.
765-(bb)(IV)Suchmaterialrelationshipshallcontinueuntilthe
766-employmentorserviceends.
767-(ii)(iv)Notwithstandingsubdivision(i)subdivisions(i)–(iii)of
768-thissubdivision(g)(1)(C),adirectorwhoisadirectorindirectownerofthe
769-riskretentiongroupisdeemedtobeindependent;andanofficer,director,or
770-1
771-2
772-3
773-4
774-5
775-6
776-7
777-8
778-9
779-10
780-11
781-12
782-13
783-14
784-15
785-16
786-17
787-18
788-19
789-20
790-21 BILLASPASSEDBYTHEHOUSE H.137
791-2025 Page20of53
792-employeeofaninsuredoftheriskretentiongroupisdeemedtobe
793-independent,unlesssomeotherrelationshipofsuchofficer,director,or
794-employeequalifiesasamaterialrelationship.
795-(D)“Materialserviceprovider”includesacaptivemanager,auditor,
796-accountant,actuary,investmentadvisor,attorney,managinggeneral
797-underwriter,orotherpersonresponsibleforunderwriting,determinationof
798-rates,premiumcollection,claimsadjustmentorsettlement,orpreparationof
799-financialstatements,whoseaggregateannualcontractfeesareequaltoor
800-greaterthanfivepercentoftheriskretentiongroup’sannualgrosswritten
801-premiumortwopercentofitssurplus,whicheverisgreater.Itdoesnotmean
802-defensecounselretainedbyariskretentiongroup,unlesshisorherthedefense
803-counsel’sannualfeeshavebeenequaltoorgreaterthanfivepercentofarisk
804-retentiongroup’sannualgrosspremiumortwopercentofitssurplus,
805-whicheverisgreater,duringthreeormoreofthepreviousfiveyears.
806-***
807-(9)Thepresidentor,chiefexecutiveofficer,orindividualauthorizedby
808-theboardofdirectorsofariskretentiongroupshallpromptlynotifythe
809-Commissionerinwritingofanyknownmaterialnoncompliancewiththe
810-governancestandardsestablishedinthissubsection.
811-Sec.15.EFFECTIVEDATE
812-Thisactshalltakeeffectonpassage.
813-1
814-2
815-3
816-4
817-5
818-6
819-7
820-8
821-9
822-10
823-11
824-12
825-13
826-14
827-15
828-16
829-17
830-18
831-19
832-20
833-21 BILLASPASSEDBYTHEHOUSE H.137
834-2025 Page21of53
835-Sec.1.8V.S.A.§ 23isamendedtoread:
836-§23.CONFIDENTIALITYOFINVESTIGATIONANDEXAMINATION
837-REPORTS
838-(a)Thissectionshallapplytoallpersonslicensed,authorized,or
839-registered,orrequiredtobelicensed,authorized,orregistered,underthistitle
840-orunder9V.S.A.chapter150bytheCommissioner.
841-(b)Regardlessofsource,allrecordsofinvestigations,including
842-informationpertainingtoacomplaintbyorforaconsumer,andallrecords
843-andreportsofexaminationsbytheCommissioner,whetherinthepossessionof
844-asupervisoryagencyoranotherperson,shallbeconfidentialandprivileged,
845-shallnotbemadepublic,andshallnotbesubjecttodiscoveryorintroduction
846-intoevidenceinanyprivatecivilaction.Nopersonwhoparticipatedon
847-behalfoftheCommissionerinaninvestigationorexaminationshallbe
848-permittedorrequiredtotestifyinanysuchcivilactionastoanyfindings,
849-recommendations,opinions,results,orotheractionsrelatingtothe
850-investigationorexamination.
851-(c)TheCommissionermay,inhisorhertheCommissioner’sdiscretion,
852-discloseorpublishorauthorizethedisclosureorpublicationofanysuch
853-recordorreportoranypartthereofinthefurtheranceoflegalorregulatory
854-proceedingsbroughtasapartoftheCommissioner’sofficialduties.The
855-Commissionermay,inhisorhertheCommissioner’sdiscretion,discloseor BILLASPASSEDBYTHEHOUSE H.137
856-2025 Page22of53
857-publishorauthorizethedisclosureorpublicationofanysuchrecordorreport
858-oranypartthereof,tocivilorcriminallawenforcementauthoritiesforusein
859-theexerciseofsuchauthority’sduties,insuchmannerastheCommissioner
860-maydeemproper.
861-(d)Forthepurposesofthissection,recordsofinvestigationsandrecords
862-andreportsofexaminationsshallincludejointexaminationsbythe
863-Commissionerandanyothersupervisoryagency.Recordsofinvestigations
864-andreportsofexaminationsshallalsoincluderecordsofexaminationsand
865-investigationsconductedby:
866-(1)anyagencywithsupervisoryjurisdictionovertheperson;and
867-(2)anyagencyofanyforeigngovernmentwithsupervisoryjurisdiction
868-overanypersonsubjecttothejurisdictionoftheDepartment,whensuch
869-recordsareconsideredconfidentialbysuchagencyorforeigngovernmentand
870-therecordsareinthepossessionoftheCommissioner.
871-Sec.2.8V.S.A.§ 3303isamendedtoread:
872-§3303.MUTUALCOMPANIES;DIRECTORS,CHARTERPROVISIONS
873-ASTO
874-Thearticlesofassociationorbylawsofamutualinsurershallsetforththe
875-mannerinwhichitsboardofdirectorsorothergoverningbodyshallbe
876-elected,andinwhichmeetingsofpolicyholdersshallbecalled,held,and BILLASPASSEDBYTHEHOUSE H.137
877-2025 Page23of53
878-conducted,subjecttosuchproceduresasmayberequiredbytheCommissioner
879-undersection75subsection15(a)ofthistitle.
880-Sec.3.8V.S.A.§ 4688(a)isamendedtoread:
881-(a)Filingsastocompetitivemarkets.Exceptwithrespecttofilings
882-submittedpursuanttosection4687ofthistitle,inacompetitivemarket,every
883-insurershallfilewiththeCommissionerallratesandsupplementaryrate
884-information,andsupportinginformationthataretobeusedinthisState,
885-providedthatsuchratesandinformationneednotbefiledforspecifically
886-ratedinlandmarinerisksorsuchotherrisksthataredesignatedbyregulation
887-oftheCommissionerasnotrequiringafiling.Suchrates,supplementaryrate
888-information,andsupportinginformationshallbeprovidedtothe
889-Commissionernotlaterthan15daysafter30dayspriortotheeffectivedate.
890-Aninsurermayadoptbyreference,withorwithoutdeviationormodification,
891-providedthatsaiddeviationormodificationisreadilyidentifiable,therates,
892-supplementaryrateinformation,andsupportinginformationfiledbyanother
893-insureroranadvisoryorserviceorganizationwithwhichitisaffiliated;
894-provided,however,suchanadoptionshallnotrelieveaninsurerfromany
895-otherrequirementsofthischapter.
896-Sec.4.8V.S.A.§ 4724isamendedtoread:
897-§ 4724.UNFAIRMETHODSOFCOMPETITIONORUNFAIROR
898-DECEPTIVEACTSORPRACTICESDEFINED BILLASPASSEDBYTHEHOUSE H.137
899-2025 Page24of53
900-***
901-(23)Affordablehousing;unfairdiscrimination.
902-(A)AninsurerthatissuesordeliversinthisStateapolicyof
903-insurancecoveringlossofordamagetorealpropertycontainingunitsfor
904-residentialpurposesorlegalliabilityofanownerorrenterofsuchreal
905-propertyshallnotcancel,refusetoissue,refusetorenew,orincreasethe
906-premiumofapolicy,orexclude,limit,restrict,orreducecoverageundera
907-policy,basedonthefollowing:
908-(i)whethertheresidentialbuildingcontainsdwellingunitsthat
909-arerequiredtobeaffordabletoresidentsataspecificincomelevelpursuantto
910-astatute,regulation,restrictivedeclaration,orregulatoryagreementwitha
911-local,State,orfederalgovernmententity;
912-(ii)whethertherealpropertyownerortenantsofsuchresidential
913-buildingortheshareholdersofacooperativehousingcorporationreceive
914-rentalassistanceprovidedbyalocal,State,orfederalgovernmententity,
915-includingthereceiptoffederalvouchersissuedunderSection8oftheU.S.
916-HousingActof1937,42 U.S.C.§ 1437f;
917-(iii)thelevelorsourceofincomeofthetenantsoftheresidential
918-buildingortheshareholdersofacooperativehousingcorporation;or
919-(iv)whethertheresidentialbuildingisownedbyalimited-equity
920-cooperative,publichousingagency,orcooperativehousingcorporation. BILLASPASSEDBYTHEHOUSE H.137
921-2025 Page25of53
922-(B)Nothinginthissectionshallprohibitaninsurerfromcancelling,
923-refusingtoissue,refusingtorenew,orincreasingthepremiumofaninsurance
924-policy,orexcluding,limiting,restricting,orreducingcoverageunderapolicy,
925-duetootherfactorsthatarepermittedornotprohibitedbyanyothersectionof
926-thischapter.
927-Sec.5.8V.S.A.§ 6002(a)isamendedtoread:
928-(a)Anycaptiveinsurancecompany,whenpermittedbyitsarticlesof
929-association,charter,orotherorganizationaldocument,mayapplytothe
930-Commissionerforalicensetodoanyandallconductinsurancebusiness
931-comprisedinsubdivisions3301(a)(1),(2),(3)(A)-(C),(E)-(Q),and(4)-(9)
932-section3301ofthistitleandmaygrantannuitycontractsasdefinedinsection
933-3717ofthistitleandmayacceptortransferriskbymeansofaparametric
934-contract;provided,however,that:
935-(1)Nopurecaptiveinsurancecompanymayinsureanyrisksotherthan
936-thoseofitsparentandaffiliatedcompaniesorcontrolledunaffiliatedbusiness.
937-(2)Noagencycaptiveinsurancecompanymaydoanyinsurance
938-businessinthisStateunless:
939-(A)aninsuranceagencyorbrokeragethatownsorcontrolsthe
940-agencycaptiveinsurancecompanyremainsinregulatorygoodstandinginall
941-statesinwhichitislicensed; BILLASPASSEDBYTHEHOUSE H.137
942-2025 Page26of53
943-(B)itinsuresonlytherisksofthecommercialpoliciesthatareplaced
944-byorthroughaninsuranceagencyorbrokeragethatownsordirectlyor
945-indirectlycontrolstheagencycaptiveinsurancecompanyand,ifrequiredby
946-theCommissionerinhisorhertheCommissioner’sdiscretion,itprovidesthe
947-Commissionertheformofsuchcommercialpolicies;
948-(C)itdisclosestotheoriginalpolicyholderorpolicyholders,ina
949-formormannerapprovedbytheCommissioner,thattheagencycaptive
950-insurancecompanyasaresultofitsaffiliationwithaninsuranceagencyor
951-brokeragemayenterintoareinsuranceorotherrisk-sharingagreementwith
952-theagencyorbrokerage;and
953-(D)ifrequiredbytheCommissionerinhisorhertheCommissioner’s
954-discretion,thebusinesswrittenbyanagencycaptiveinsurancecompanyis:
955-(i)Frontedbyaninsurancecompanylicensedunderthelawsof
956-anystate.
957-(ii)ReinsuredbyareinsurerauthorizedorapprovedbytheState
958-ofVermont.
959-(iii)SecuredbyatrustfundintheUnitedStatesforthebenefitof
960-policyholdersandclaimantsorfundedbyanirrevocableletterofcreditor
961-otherarrangementthatisacceptabletotheCommissioner.TheCommissioner
962-mayrequiretheagencycaptiveinsurancecompanytoincreasethefundingof
963-anysecurityarrangementestablishedunderthissubdivision.Iftheformof BILLASPASSEDBYTHEHOUSE H.137
964-2025 Page27of53
965-securityisaletterofcredit,theletterofcreditshallbeissuedorconfirmedby
966-abankapprovedbytheCommissioner.Atrustmaintainedpursuanttothis
967-subdivisionshallbeestablishedinaformandupontermsapprovedbythe
968-Commissioner.
969-(3)Noassociationcaptiveinsurancecompanymayinsureanyrisks
970-otherthanthoseofitsassociation,thoseofthememberorganizationsofits
971-association,andthoseofamemberorganization’saffiliatedcompanies.
972-(4)Noindustrialinsuredcaptiveinsurancecompanymayinsureany
973-risksotherthanthoseoftheindustrialinsuredsthatcomprisetheindustrial
974-insuredgroup,thoseoftheiraffiliatedcompanies,andthoseofthecontrolled
975-unaffiliatedbusinessofanindustrialinsuredoritsaffiliatedcompanies.
976-(5)Noriskretentiongroupmayinsureanyrisksotherthanthoseofits
977-membersandowners.
978-(6)Nocaptiveinsurancecompanymayprovidepersonalmotorvehicle
979-orhomeowner’sinsurancecoverageoranycomponentthereof.
980-(7)Nocaptiveinsurancecompanymayacceptorcedereinsurance
981-exceptasprovidedinsection6011ofthistitle.
982-(8)Anycaptiveinsurancecompanymayprovideexcessworkers’
983-compensationinsurancetoitsparentandaffiliatedcompanies,unless
984-prohibitedbythefederallaworlawsofthestatehavingjurisdictionoverthe
985-transaction.Anycaptiveinsurancecompany,unlessprohibitedbyfederallaw, BILLASPASSEDBYTHEHOUSE H.137
986-2025 Page28of53
987-mayreinsureworkers’compensationofaqualifiedself-insuredplanofits
988-parentandaffiliatedcompanies.
989-(9)Anycaptiveinsurancecompanythatinsuresrisksdescribedin
990-subdivisions3301(a)(1)and(2)ofthistitleshallcomplywithallapplicable
991-Stateandfederallaws.
992-(10)Anycaptiveinsurancecompanythattransfersriskbymeansofa
993-parametriccontractshallcomplywithallapplicableStateandfederallaws
994-andregulations.
995-Sec.6.8V.S.A.§ 6004(d)isamendedtoread:
996-(d)Within30daysaftercommencingbusiness,eachcaptiveinsurance
997-companyshallfilewiththeCommissionerastatementunderoathofits
998-presidentandsecretaryor,inthecaseofacaptiveinsurancecompanyformed
999-asalimitedliabilitycompanyorasareciprocalinsurer,oftwoindividuals
1000-authorizedbythegoverningboardcertifyingthatthecaptiveinsurance
1001-companypossessedtherequisiteunimpaired,paid-incapitalandsurplusprior
1002-tocommencingbusiness.
1003-Sec.7.8V.S.A.§ 6006isamendedtoread:
1004-§6006.FORMATIONOFCAPTIVEINSURANCECOMPANIESINTHIS
1005-STATE
1006-*** BILLASPASSEDBYTHEHOUSE H.137
1007-2025 Page29of53
1008-(h)Otherthancaptiveinsurancecompaniesformedaslimitedliability
1009-companiesunder11V.S.A.chapter21chapter25orasnonprofitcorporations
1010-underTitle11B,captiveinsurancecompaniesformedascorporationsunder
1011-theprovisionsofthischaptershallhavetheprivilegesandbesubjecttothe
1012-provisionsofTitle11Aaswellastheapplicableprovisionscontainedinthis
1013-chapter.Intheeventofconflictbetweentheprovisionsofsaidgeneral
1014-corporationlawandtheprovisionsofthischapter,thelattershallcontrol.
1015-(i)Captiveinsurancecompaniesformedundertheprovisionsofthis
1016-chapter:
1017-(1)Aslimitedliabilitycompaniesshallhavetheprivilegesandbe
1018-subjecttotheprovisionsof11V.S.A.chapter21chapter25aswellasthe
1019-applicableprovisionscontainedinthischapter.Intheeventofaconflict
1020-betweentheprovisionsof11V.S.A.chapter21chapter25andtheprovisionsof
1021-thischapter,thelattershallcontrol.
1022-(2)Asnonprofitcorporationsshallhavetheprivilegesandbesubjectto
1023-theprovisionsofTitle11Baswellastheapplicableprovisionscontainedin
1024-thischapter.IntheeventofconflictbetweentheprovisionsofTitle11Band
1025-theprovisionsofthischapter,thelattershallcontrol.
1026-(3)Asmutualinsurersshallhavetheprivilegesandbesubjecttothe
1027-provisionsofsections3303and3311ofthistitleaswellastheapplicable
1028-provisionscontainedinthischapter.Intheeventofaconflictbetweenthe BILLASPASSEDBYTHEHOUSE H.137
1029-2025 Page30of53
1030-provisionsofsections3303and3311ofthistitleandtheprovisionsofthis
1031-chapter,thelattershallcontrol.
1032-***
1033-Sec.8.8V.S.A.§ 6006a(a)isamendedtoread:
1034-(a)Anycaptiveinsurancecompanymeetingthequalificationssetforthin
1035-subdivision6006(j)(1)ofthistitlemaymergewithanyotherinsurer,whether
1036-licensedinthisStateorelsewhere,inthefollowingmanner:
1037-(1)Theboardofdirectorsofeachinsurershall,byaresolutionadopted
1038-byamajorityvoteofthemembersofsuchboard,approveajointagreementof
1039-mergersettingforth:
1040-(A)thenamesoftheinsurersproposedtomerge,andthenameofthe
1041-insurerintowhichtheyproposetomerge,whichishereafterdesignatedasthe
1042-survivingcompany;
1043-(B)thetermsandconditionsoftheproposedmergerandthemodeof
1044-carryingthesameintoeffect;
1045-(C)themannerandbasisofconvertingtheownershipinterests,if
1046-applicable,inotherthanthesurvivinginsurerintoownershipinterestsorother
1047-consideration,securities,orobligationsofthesurvivinginsurer;
1048-(D)arestatementofsuchprovisionsofthearticlesofincorporation
1049-ofthesurvivinginsurerasmaybedeemednecessaryoradvisabletogiveeffect
1050-totheproposedmerger;and BILLASPASSEDBYTHEHOUSE H.137
1051-2025 Page31of53
1052-(E)anyotherprovisionswithrespecttotheproposedmergerasare
1053-deemednecessaryordesirable.
1054-(2)Theresolutionoftheboardofdirectorsofeachinsurerapproving
1055-theagreementshalldirectthattheagreementbesubmittedtoavoteofthe
1056-shareholders,members,orpolicyholders,asthecasemaybe,ofeachinsurer
1057-entitledtovoteinrespectthereofatadesignatedmeetingthereof,orvia
1058-unanimouswrittenconsentofsuchshareholders,members,orpolicyholdersin
1059-lieuofameeting.Noticeofthemeetingshallbegivenasprovidedinthe
1060-bylaws,charter,orarticlesofassociation,orothergovernancedocument,as
1061-thecasemaybe,ofeachinsurerandshallspecificallyreflecttheagreementas
1062-amattertobeconsideredatthemeeting.
1063-(3)Theagreementofmergersoapprovedshallbesubmittedtoavoteof
1064-theshareholders,members,orpolicyholders,asthecasemaybe,ofeach
1065-insurerentitledtovoteinrespectthereofatthemeetingdirectedbythe
1066-resolutionoftheboardofdirectorsofsuchcompanyapprovingtheagreement,
1067-andtheagreementshallbeunanimouslyadoptedbytheshareholders,
1068-members,orpolicyholders,asthecasemaybe.
1069-(4)Followingtheadoptionoftheagreementbyanyinsurer,articlesof
1070-mergershallbeadoptedinthefollowingmanner:
1071-(A)Upontheexecutionoftheagreementofmergerbyallofthe
1072-insurerspartiesthereto,thereshallbeexecutedandfiled,inthemanner BILLASPASSEDBYTHEHOUSE H.137
1073-2025 Page32of53
1074-hereafterprovided,articlesofmergersettingforththeagreementofmerger,the
1075-signaturesoftheseveralinsurerspartiesthereto,themannerofitsadoption,
1076-andthevotebywhichadoptedbyeachinsurer.
1077-(B)Thearticlesofmergershallbesignedonbehalfofeachinsurer
1078-byadulyauthorizedofficeror,inthecaseofaninsurerformedasalimited
1079-liabilitycompanyorasareciprocalinsurer,byanindividualauthorizedbythe
1080-governingboard,insuchmultiplecopiesasshallberequiredtoenablethe
1081-insurerstocomplywiththeprovisionsofthissubchapterwithrespecttofiling
1082-andrecordingthearticlesofmerger,andshallthenbepresentedtothe
1083-Commissioner.
1084-(C)TheCommissionershallapprovethearticlesofmergerifheor
1085-shetheCommissionerfindsthatthemergerwillpromotethegeneralgoodof
1086-theStateinconformitywiththosestandardssetforthinsection3305ofthis
1087-title.IfheorshetheCommissionerapprovesthearticlesofmerger,heorshe
1088-theCommissionershallissueacertificateofapprovalofmerger.
1089-(5)Theinsurershallfilethearticlesofmerger,accompaniedbythe
1090-agreementofmergerandthecertificateofapprovalofmerger,withthe
1091-SecretaryofStateandpayallfeesasrequiredbylaw.IftheSecretaryofState
1092-findsthattheyconformtolaw,heorshetheSecretaryshallissueacertificate
1093-ofmergerandreturnittothesurvivinginsureroritsrepresentatives.The BILLASPASSEDBYTHEHOUSE H.137
1094-2025 Page33of53
1095-mergershalltakeeffectuponthefilingofarticlesofmergerwiththeSecretary
1096-ofState,unlessalatereffectivedateisspecifiedtherein.
1097-(6)Thesurvivinginsurershallfileacopyofthecertificateofmerger
1098-fromtheSecretaryofStatewiththeCommissioner.
1099-Sec.9.8V.S.A.§ 6007(b)isamendedtoread:
1100-(b)PriortoMarch1ofeachyear,andpriortoMarch15ofeachyearin
1101-thecaseofpurecaptiveinsurancecompanies,associationcaptiveinsurance
1102-companies,sponsoredcaptiveinsurancecompanies,industrialinsuredcaptive
1103-insurancecompanies,oragencycaptiveinsurancecompanies,eachcaptive
1104-insurancecompanyshallsubmittotheCommissionerareportofitsfinancial
1105-condition,verifiedbyoathoftwoofitsexecutiveofficersor,inthecaseofa
1106-captiveinsurancecompanyformedasalimitedliabilitycompanyorasa
1107-reciprocalinsurer,oftwoindividualsauthorizedbythegoverningboard.Each
1108-captiveinsurancecompanyshallreportusinggenerallyacceptedaccounting
1109-principles,statutoryaccountingprinciples,orinternationalfinancialreporting
1110-standardsunlesstheCommissionerrequires,approves,oracceptstheuseof
1111-anyothercomprehensivebasisofaccounting,ineachcasewithany
1112-appropriateornecessarymodificationsoradaptationsthereofrequiredor
1113-approvedoracceptedbytheCommissionerforthetypeofinsuranceandkinds
1114-ofinsurerstobereportedupon,andassupplementedbyadditional
1115-informationrequiredbytheCommissioner.Asusedinthissection,statutory BILLASPASSEDBYTHEHOUSE H.137
1116-2025 Page34of53
1117-accountingprinciplesshallmeantheaccountingprinciplescodifiedinthe
1118-NAICAccountingPracticesandProceduresManual.Uponapplicationfor
1119-admission,acaptiveinsurancecompanyshallselect,withexplanation,an
1120-accountingmethodforreporting.Anychangeinacaptiveinsurance
1121-company’saccountingmethodshallrequirepriorapproval.Exceptas
1122-otherwiseprovided,eachriskretentiongroupshallfileitsreportintheform
1123-requiredbysubsection3561(a)ofthistitle,andeachriskretentiongroupshall
1124-complywiththerequirementssetforthinsection3569ofthistitle.The
1125-Commissionershallbyruleproposetheformsinwhichpurecaptiveinsurance
1126-companies,associationcaptiveinsurancecompanies,sponsoredcaptive
1127-insurancecompanies,andindustrialinsuredcaptiveinsurancecompanies
1128-shallreport.Subdivision6002(c)(3)ofthistitleshallapplytoeachreportfiled
1129-pursuanttothissection,exceptthatsuchsubdivisionshallnotapplytoreports
1130-filedbyriskretentiongroups.
1131-Sec.10.8V.S.A.§ 6011(a)isamendedtoread:
1132-(a)Anycaptiveinsurancecompanymayprovidereinsurance,ofpolicies
1133-approvedbytheCommissionercomprisedinsubsection3301(a)section3301
1134-ofthistitle,onrisksofitsparent,affiliatedcompanies,andcontrolled
1135-unaffiliatedbusinesscededbyanyotherinsurer,andmayprovidereinsurance
1136-ofannuitycontractsasdefinedinsection3717ofthistitlethataregrantedby
1137-anyotherinsurer. BILLASPASSEDBYTHEHOUSE H.137
1138-2025 Page35of53
1139-Sec.11.8V.S.A.§ 6024(c)isamendedtoread:
1140-(c)Adormantcaptiveinsurancecompanythathasbeenissuedacertificate
1141-ofdormancyshall:
1142-(1)possessandthereaftermaintainunimpaired,paid-incapitaland
1143-surplusofnotlessthan$25,000.00;provided,however,thatifthedormant
1144-captiveinsurancecompanyhadnevercapitalized,itshallnotberequiredto
1145-addcapitaluponenteringdormancy;
1146-(2)priortoMarch15ofeachyear,submittotheCommissionerareport
1147-ofitsfinancialcondition,verifiedbyoathoftwoofitsexecutiveofficersor,in
1148-thecaseofacaptiveinsurancecompanyformedasalimitedliabilitycompany
1149-orasareciprocalinsurer,oftwoindividualsauthorizedbyitsgoverning
1150-board,inaformasmaybeprescribedbytheCommissioner;and
1151-(3)payalicenserenewalfeeof$500.00.
1152-Sec.12.8V.S.A.§ 6045isamendedtoread:
1153-§6045.BRANCHCAPTIVEREPORTS
1154-PriortoMarch15ofeachyear,orwiththeapprovaloftheCommissioner
1155-within75daysafteritsfiscalyear-end,abranchcaptiveinsurancecompany
1156-shallfilewiththeCommissioneracopyofallreportsandstatementsrequired
1157-tobefiledunderthelawsofthejurisdictioninwhichthealiencaptive
1158-insurancecompanyisformed,verifiedbyoathoftwoofitsexecutiveofficers
1159-or,inthecaseofabranchcaptiveinsurancecompanyformedasalimited BILLASPASSEDBYTHEHOUSE H.137
1160-2025 Page36of53
1161-liabilitycompanyorasareciprocalinsurer,oftwoindividualsauthorizedby
1162-thegoverningboard.IftheCommissionerissatisfiedthattheannualreport
1163-filedbythealiencaptiveinsurancecompanyinitsdomiciliaryjurisdiction
1164-providesadequateinformationconcerningthefinancialconditionofthealien
1165-captiveinsurancecompany,theCommissionermaywaivetherequirementfor
1166-completionofthecaptiveannualstatementforbusinesswritteninthealien
1167-jurisdiction.
1168-Sec.13.8V.S.A.§ 6048d(c)(2)isamendedtoread:
1169-(2)Thespecialpurposefinancialinsurancecompanyshallsubmitan
1170-affidavitofitspresident,avicepresident,thetreasurer,orthechieffinancial
1171-officeror,inthecaseofaspecialpurposefinancialinsurancecompanyformed
1172-asalimitedliabilitycompanyorasareciprocalinsurer,ofanindividual
1173-authorizedbythegoverningboardthatincludesthefollowingstatements,to
1174-thebestofsuchperson’sknowledgeandbeliefafterreasonableinquiry:
1175-(A)theproposedorganizationandoperationofthespecialpurpose
1176-financialinsurancecompanycomplywithallapplicableprovisionsofthis
1177-chapter;
1178-(B)thespecialpurposefinancialinsurancecompany’sinvestment
1179-policyreflectsandtakesintoaccounttheliquidityofassetsandthereasonable
1180-preservation,administration,andmanagementofsuchassetswithrespectto BILLASPASSEDBYTHEHOUSE H.137
1181-2025 Page37of53
1182-therisksassociatedwiththereinsurancecontractandtheinsurance
1183-securitizationtransaction;and
1184-(C)thereinsurancecontractandanyarrangementforsecuringthe
1185-specialpurposefinancialinsurancecompany’sobligationsundersuch
1186-reinsurancecontract,includinganyagreementsorotherdocumentationto
1187-implementsucharrangement,complywiththeprovisionsofthissubchapter.
1188-Sec.14.8V.S.A.§ 6052(g)isamendedtoread:
1189-(g)Thissubsectionestablishesgovernancestandardsforariskretention
1190-group.
1191-(1)Asusedinthissubsection:
1192-(A)“Boardofdirectors”or“board”meansthegoverningbodyofa
1193-riskretentiongroupelectedbyriskretentiongroupmemberstoestablish
1194-policy,electorappointofficersandcommittees,andmakeothergoverning
1195-decisions.
1196-(B)“Director”meansanaturalpersondesignatedinthearticlesof
1197-theriskretentiongroupordesignated,elected,orappointedbyanyother
1198-manner,name,ortitletoactasamemberofthegoverningbodyoftherisk
1199-retentiongroup.
1200-(C)(i)“Independentdirector”meansadirectorwhodoesnothavea
1201-materialrelationshipwiththeriskretentiongroup.Adirectorhasamaterial BILLASPASSEDBYTHEHOUSE H.137
1202-2025 Page38of53
1203-relationshipwithariskretentiongroupifheorshethedirector,oramember
1204-ofhisorherthedirector’simmediatefamily:
1205-(I)(i)Inany12-monthperiod,receivesfromtheriskretention
1206-group,orfromaconsultantorserviceprovidertotheriskretentiongroup,
1207-compensationorotheritemoritemsofvalueinanamountequaltoorgreater
1208-thanfivepercentoftheriskretentiongroup’sgrosswrittenpremiumortwo
1209-percentoftheriskretentiongroup’ssurplus,asmeasuredattheendofany
1210-fiscalquarterfallinginsuch12-monthperiod,whicheverisgreater.This
1211-provisionalsoappliestocompensationoritemsofvaluereceivedbyany
1212-businesswithwhichthedirectorisaffiliated.Suchmaterialrelationshipshall
1213-continueforoneyearafterreceiptoftheitemoritemsofvalueorthe
1214-compensationfallsbelowthethresholdestablishedinthissubdivision.
1215-(II)(ii)Hasarelationshipwithanauditorasfollows:Isaffiliated
1216-withoremployedinaprofessionalcapacitybyacurrentorformerinternalor
1217-externalauditoroftheriskretentiongroup.Suchmaterialrelationshipshall
1218-continueforoneyearaftertheaffiliationoremploymentends.
1219-(aa)(iii)Isemployedasanexecutiveofficerofanotherbusiness
1220-entitythatisaffiliatedwiththeriskretentiongroupbyvirtueofcommon
1221-ownershipandcontrol,ifsuchentitymeetsallofthefollowingcriteria:
1222-(AA)(I)theentityisnotaninsuredoftheriskretentiongroup; BILLASPASSEDBYTHEHOUSE H.137
1223-2025 Page39of53
1224-(BB)(II)theentityhasacontractualrelationshipwiththerisk
1225-retentiongroup;and
1226-(CC)(III)thegoverningboardoftheentityincludesexecutive
1227-officersoftheriskretentiongroup,unlessamajorityofthemembershipof
1228-suchentity’sgoverningboardiscomposedofindividualswhoaremembersof
1229-thegoverningboardoftheriskretentiongroup.
1230-(bb)(IV)Suchmaterialrelationshipshallcontinueuntilthe
1231-employmentorserviceends.
1232-(ii)(iv)Notwithstandingsubdivision(i)subdivisions(i)–(iii)ofthis
1233-subdivision(g)(1)(C),adirectorwhoisadirectorindirectowneroftherisk
1234-retentiongroupisdeemedtobeindependent;andanofficer,director,or
1235-employeeofaninsuredoftheriskretentiongroupisdeemedtobeindependent,
1236-unlesssomeotherrelationshipofsuchofficer,director,oremployeequalifies
1237-asamaterialrelationship.
1238-(D)“Materialserviceprovider”includesacaptivemanager,auditor,
1239-accountant,actuary,investmentadvisor,attorney,managinggeneral
1240-underwriter,orotherpersonresponsibleforunderwriting,determinationof
1241-rates,premiumcollection,claimsadjustmentorsettlement,orpreparationof
1242-financialstatements,whoseaggregateannualcontractfeesareequaltoor
1243-greaterthanfivepercentoftheriskretentiongroup’sannualgrosswritten
1244-premiumortwopercentofitssurplus,whicheverisgreater.Itdoesnotmean BILLASPASSEDBYTHEHOUSE H.137
1245-2025 Page40of53
1246-defensecounselretainedbyariskretentiongroup,unlesshisorherthedefense
1247-counsel’sannualfeeshavebeenequaltoorgreaterthanfivepercentofarisk
1248-retentiongroup’sannualgrosspremiumortwopercentofitssurplus,
1249-whicheverisgreater,duringthreeormoreofthepreviousfiveyears.
1250-***
1251-(9)Thepresidentorchiefexecutiveofficeror,inthecaseofarisk
1252-retentiongroupformedasalimitedliabilitycompanyorasareciprocal
1253-insurer,anindividualauthorizedbytheboardofdirectorsofariskretention
1254-groupshallpromptlynotifytheCommissionerinwritingofanyknownmaterial
1255-noncompliancewiththegovernancestandardsestablishedinthissubsection.
1256-Sec.15.8V.S.A.§ 2504isamendedtoread:
1257-§2504.EXEMPTIONS
1258-Thischapterdoesnotapplyto:
1259-***
1260-(18)Apersonthatperformspayrollcalculations,preparespayroll
1261-instructions,preparesandfilesStateorfederalincomewithholdingtaxreports
1262-andunemploymentinsurancecompensationreports,orprovidesotherpayroll-
1263-relatedservices,butthatdoesnotengageinthebusinessofpayrollprocessing
1264-servicesorotherwiseengageinthebusinessofmoneytransmissioninthis
1265-Stateorotheractsrequiringalicenseunderthischapter. BILLASPASSEDBYTHEHOUSE H.137
1266-2025 Page41of53
1267-(19)Apersonthatdoesnotprovidepayrollprocessingservicestoany
1268-employerthathasitsprincipalplaceofbusinessinthisStateandthatdoesnot
1269-otherwiseengageinthebusinessofmoneytransmissioninthisStateorother
1270-actsrequiringalicenseunderthischapter.
1271-(20)Apersonthat:
1272-(A)providespayrollprocessingservicesto25orfeweremployers
1273-thathavetheirprincipalplaceofbusinessinthisState;
1274-(B)providespayrollprocessingservicesto500orfeweremployers,
1275-regardlessofwheretheprincipalplaceofbusinessofeachemployeris
1276-located;
1277-(C)providespayrollprocessingservicesinvolvingtransmissionto
1278-lessthan300Vermontresidentemployees,regardlessofwheretheprincipal
1279-placeofbusinessoftheiremployerislocated;
1280-(D)hasnotbeenconvictedof,orpledguiltyornolocontendereto,a
1281-felonyinadomestic,foreign,ormilitarycourt,andnokeyindividualor
1282-personincontrolofsuchpersonhasbeenconvictedof,orpledguiltyornolo
1283-contendereto,afelonyinadomestic,foreign,ormilitarycourt;
1284-(E)hasneverhadafinancialserviceslicenseorprofessionallicense
1285-revokedinanyjurisdictionandnokeyindividualorpersonincontrolofsuch
1286-personhaseverhadafinancialserviceslicenseorprofessionallicenserevoked BILLASPASSEDBYTHEHOUSE H.137
1287-2025 Page42of53
1288-inanyjurisdiction,exceptthatasubsequentformalvacationofsuch
1289-revocationshallnotbedeemedarevocation;
1290-(F)doesnototherwiseengageinthebusinessofmoneytransmission
1291-inthisStateorotheractsrequiringalicenseunderthischapter;and
1292-(G)receivesandholdsallmoneyormonetaryvaluereceivedfor
1293-transmissionexclusivelyin:
1294-(i)segregatedtrustaccountswithfederallyinsuredfinancial
1295-institutionsorcreditunionsforthebenefitofitsemployercustomersor
1296-applicablegovernmentalauthorities,suchthatthefundsinsuchaccountsare
1297-notsubjecttoclaimsorliensofitscreditors;or
1298-(ii)depositaccountsatfederallyinsuredfinancialinstitutionsor
1299-creditunionsthatarebothtitledinthenameandtaxidentificationnumberof
1300-thefinancialinstitutionorcreditunionandforthebenefitoftheperson’s
1301-customers.
1302-Sec.16.9V.S.A.§ 42isamendedtoread:
1303-§42.PERMITTEDCHARGES
1304-(a)Exceptforinterestasprovidedinthischapter,alendershallmakeno
1305-chargesagainstaborrowerfortheuseorforbearanceofmoneyotherthan:
1306-*** BILLASPASSEDBYTHEHOUSE H.137
1307-2025 Page43of53
1308-(7)thereasonablecostofprivatemortgageguarantyinsurancesubject
1309-tosuchlimitationastheCommissionerofFinancialRegulationhasapproved;
1310-and
1311-(8)thereasonablefeesassociatedwithacreditcard,agreeduponbythe
1312-lenderandborrower,includinglatechargesandover-limitcharges;and
1313-(9)discountpoints,attherequestoftheborrowerforthepurposeof
1314-reducing,andwhichinfactresultinabonafidereductionof,theinterestrate
1315-ortime-pricedifferentialapplicabletotheloan.
1316-(b)Aborrowermayprocureanopinionandabstractoftitlefroman
1317-attorneyofhisorhertheborrower’schoiceacceptabletothelender,orhazard
1318-insuranceinacompanyorincompaniesofhisorhertheborrower’schoice
1319-acceptabletothelender,andinsuchcasesthelender’sacceptanceshallnotbe
1320-unreasonablywithheld.
1321-Sec.17.STUDY;BANKS;SUSPICIOUSACTIVITY;TRANSACTION
1322-HOLD
1323-(a)TheCommissionerofFinancialRegulationordesigneeshallstudy
1324-regulatorymodelsthatwouldallowafinancialinstitutiontotakemeasuresto
1325-protectaccountholdersfromfraudulenttransactionsandshallrecommenda
1326-modelforlegislativeconsideration.Thestudyshallincludeareviewof
1327-regulatorymodelsenactedorproposedinotherjurisdictions. BILLASPASSEDBYTHEHOUSE H.137
1328-2025 Page44of53
1329-(b)Inconductingthestudyrequiredbythissection,theCommissionershall
1330-consultwitharepresentativefromtheVermontBankersAssociation,the
1331-AssociationofVermontCreditUnions,AARPVermont,theOfficeofthe
1332-AttorneyGeneral,VermontLegalAid,andanyotherpersondeemed
1333-appropriatebytheCommissioner.
1334-(c)Amongotherthings,thestudyshallincluderecommendationsregarding
1335-thefollowing:
1336-(1)thefinancialinstitutionssubjecttotheproposedmodel;
1337-(2)whetherspecificaccountholders,suchasseniorsorvulnerable
1338-populations,shouldreceiveheightenedprotection;
1339-(3)notificationandconsultationrequirementsavailabletoanaccount
1340-holdersuspectedtobethevictimoffraudulentactivity;
1341-(4)areasonabletimeperiodforimposingatransactionholdpending
1342-theoutcomeofaninternalinvestigation;
1343-(5)notificationtotheDepartmentofFinancialRegulationand,if
1344-appropriate,lawenforcementorotherthirdpartiesiffraudulentactivityis
1345-suspected;
1346-(6)continuedaccountholderaccesstofundsfortransactionsnot
1347-suspectedofbeingassociatedwithfraudulentactivity; BILLASPASSEDBYTHEHOUSE H.137
1348-2025 Page45of53
1349-(7)immunityfromcivilliabilityforanyfinancialinstitutionthatactsin
1350-goodfaithforthepurposeofprotectingaccountholdersfromfraudulent
1351-activityandthatotherwisecomplieswithapplicablelegalrequirements;and
1352-(8)anyotherprovisiondeemedappropriatebytheCommissioner.
1353-(d)OnorbeforeNovember15,2025,theCommissionershallprovidea
1354-statusreportontheCommissioner’spreliminaryfindingsand
1355-recommendationstotheChairoftheHouseCommitteeonCommerceand
1356-EconomicDevelopmentandtheChairoftheSenateCommitteeonFinance
1357-and,onorbeforeJanuary15,2026,shallsubmitafinalreportindraftformto
1358-theHouseCommitteeonCommerceandEconomicDevelopmentandthe
1359-SenateCommitteeonFinance.
1360-Sec.18.STUDY;PROTECTIONSFORVICTIMSOFCOERCEDDEBT
1361-(a)TheCommissionerofFinancialRegulationordesigneeshallstudy
1362-regulatorymodelsforprovidingprotectionsandremediesforvictimsof
1363-coerceddebtandshallrecommendamodelappropriateforVermont.In
1364-particular,theCommissionershallreviewtheModelStateCoercedDebtLaw
1365-preparedbytheNationalConsumerLawCenterinMayof2024,aswellas
1366-lawsenactedorproposedinotherjurisdictions.
1367-(b)Inconductingthestudyrequiredbythissection,theCommissionershall
1368-consultwitharepresentativefromtheVermontNetwork,theVermontBankers
1369-Association,theAssociationofVermontCreditUnions,theOfficeofthe BILLASPASSEDBYTHEHOUSE H.137
1370-2025 Page46of53
1371-AttorneyGeneral,VermontLegalAid,andanyotherpersondeemed
1372-appropriatebytheCommissioner.
1373-(c)Amongotherthings,thestudyshallincluderecommendationsregarding
1374-thefollowing:
1375-(1)adefinitionofcoerceddebt;
1376-(2)whethercoerceddebtshouldincludebothsecuredandunsecured
1377-debt;
1378-(3)therequisiteinformationadebtormustprovideacreditorwhen
1379-allegingcoerceddebt;
1380-(4)proceduresacreditormustfollowregardingtheinvestigationofan
1381-allegationofcoerceddebt,includingceasingcollectioneffortsandnotifying
1382-theDepartmentofFinancialRegulation,theOfficeoftheAttorneyGeneral,
1383-andotherlawenforcementpersonnel,ifappropriate;
1384-(5)whetheracreditreportingagencyshouldremovecoerceddebtfrom
1385-acreditreportand,ifso,theprocessfordoingso;
1386-(6)whetherVermont’sidentitytheftlaw,13V.S.A.§ 2030,shouldbe
1387-expandedtomorespecificallyreferenceinstancesofcoerceddebt;and
1388-(7)anyotherprovisiondeemedappropriatebytheCommissioner.
1389-(d)OnorbeforeJanuary15,2026,theCommissionershallreportthe
1390-Commissioner’sfindingsandrecommendationsindraftformtotheHouse BILLASPASSEDBYTHEHOUSE H.137
1391-2025 Page47of53
1392-CommitteeonCommerceandEconomicDevelopmentandtheSenate
1393-CommitteeonFinance.
1394-Sec.19.RECOMMENDATION REGARDINGINSURANCEAND
1395-GENETICPRIVACY
1396-OnorbeforeNovember15,2025,andforthepurposeofpreventingunfair
1397-geneticdiscriminationandsafeguardinganindividual’sgeneticprivacy,the
1398-CommissionerofFinancialRegulationshallprovidearecommendationtothe
1399-HouseCommitteeonCommerceandEconomicDevelopmentandtheSenate
1400-CommitteeonFinanceonwhetherVermontshouldenactalawprohibitingor
1401-limitinganinsurancecompany’saccesstoaconsumer’spersonalizedgenetic
1402-reportthatisnotpartoftheconsumer’smedicalrecord.Amongotherthings,
1403-theCommissionershallconsiderwhethertorequirethataninsurance
1404-companyobtainconsumerconsentpriortothedisclosureofgenetic
1405-informationobtainedfromadirect-to-consumerentitytoaninsurance
1406-company,includinganycompanythatoffershealth,long-termcare,life,or
1407-disabilityinsurance.
1408-Sec.20.8V.S.A.§ 4062bisamendedtoread:
1409-§4062b.MEDICARESUPPLEMENTALHEALTHSUPPLEMENT
1410-INSURANCERATEREVIEW
1411-(a)Withinfivebusinessdaysafterreceivinganyrequesttoincreasethe
1412-premiumrateforaMedicaresupplementinsurancepolicyfromthehealth BILLASPASSEDBYTHEHOUSE H.137
1413-2025 Page48of53
1414-insurancecompany,hospitalormedicalserviceorganization,orhealth
1415-maintenanceorganizationissuingthepolicy,theDepartmentshallpost
1416-informationabouttheratefilingontheDepartment’swebsite,including:
1417-(1)thenameofthehealthinsurancecompany,hospitalormedical
1418-serviceorganization,orhealthmaintenanceorganizationrequestingtherate
1419-increase;
1420-(2)theoverallcompositeaveragerateincreaserequested;
1421-(3)theincreaserequestedbyplantype;
1422-(4)thedateonwhichtheproposedincreasewouldtakeeffect;
1423-(5)theSystemforElectronicRateandFormFiling(SERFF)tracking
1424-numberassociatedwiththefilingandawebaddressforaccessingthefiling
1425-electronically;and
1426-(6)instructionsforsubmittingpubliccommentsandthedeadlinefor
1427-doingso.
1428-(b)Withinfivebusinessdaysofafterreceivingarequestforapprovalof
1429-anycompositeaveragerateincreaseinexcessofthree10percent,oranyother
1430-coveragechangeswhichthattheCommissionerdetermineswillhavea
1431-comparableimpactoncostoravailabilityofcoverageforaMedicare
1432-supplementalsupplementinsurancepolicyissuedbyanygroupornongroup
1433-healthinsurancecompany,hospitalormedicalserviceorganization,orhealth
1434-maintenanceorganization,with5,000ormoretotallivesintheVermont BILLASPASSEDBYTHEHOUSE H.137
1435-2025 Page49of53
1436-Medicaresupplementinsurancemarket,theCommissionershallnotifythe
1437-DepartmentofDisabilities,Aging,andIndependentLivingandtheOfficeof
1438-theHealthCareAdvocateoftheproposedpremiumincrease.Acomposite
1439-averagerateistheenrollment-weightedaveragerateincreaseofallplans
1440-offeredbyacarrier.
1441-(b)(c)Withinfivebusinessdaysafterreceivingnotificationpursuantto
1442-subsection(a)(b)ofthissection,theDepartmentofDisabilities,Aging,and
1443-IndependentLivingshallinformthemembersoftheAdvisoryBoard
1444-establishedpursuantto33V.S.A.§505oftheproposedpremiumincrease.
1445-(c)(d)(1)TheCommissionershallnotapproveanyrequesttoincrease
1446-Medicaresupplementalsupplementinsurancepremiumratesunlessthe
1447-amountoftherateincreasecomplieswiththestatutorystandardsforapproval
1448-undersections4062,4513,4584,and5104ofthistitle.Anyapprovedrate
1449-increaseshallnotbebasedonanunreasonablechangeinlossratiofromthe
1450-previousyear,unlesstheCommissionermakeswrittenfindingsthatsuch
1451-changeisnecessarytopreventasubstantialadverseimpactonthefinancial
1452-conditionoftheinsurer.Inactingonsuchrateincreaserequests,the
1453-Commissionermaydenytherequest,approvetherateincreaseasrequested,or
1454-approvearateincreaseinanamountdifferentfromtheincreaserequested.A
1455-decisionbytheCommissionerotherthananapprovaloftheraterequested
1456-maybeappealedbytheinsurer,providedthattheburdenofproofshallbeon BILLASPASSEDBYTHEHOUSE H.137
1457-2025 Page50of53
1458-theinsurertoshowthattheapprovedratedoesnotmeetthestatutory
1459-standardsestablishedunderthissubsection.
1460-(2)Beforeactingontherateincreaserequested,theCommissionermay
1461-makesuchexaminationorinvestigationasheorshetheCommissionerdeems
1462-necessary,includingwhereapplicablethereviewprocesssetforthin
1463-subdivision(3)ofthissubsection.
1464-(3)InreviewinganyMedicaresupplementrateincreaseforwhichan
1465-independentanalysishasbeenperformedpursuantto33V.S.A.§6706and
1466-whereinthecarrier’srequestedcompositeaverageincrease,theindependent
1467-expert’srecommendedcompositeaveragerateincrease,ortheDepartment
1468-actuary’srecommendedcompositeaveragerateincreasedifferbytwo
1469-percentagepointsormore,theCommissionershallholdapublichearing
1470-wheretheinsurer,theDepartment’sactuary,theindependentexpert,any
1471-intervenor,andthepublicwillhavetheopportunitytopresentwrittenandoral
1472-testimonyandwillbeavailabletoanswerquestionsoftheCommissionerand
1473-thosepresent.Thehearingshallbenoticedandheldatatimeandplacesoas
1474-tofacilitatepublicparticipation,andshallberecordedandbecomepartofthe
1475-recordbeforetheCommissioner.IntheCommissioner’sdiscretion,thehearing
1476-maybeconductedthroughinteractive.Ifthecarrier’srequestedcomposite
1477-averageincrease,theindependentexpert’srecommendedcompositeaverage
1478-increase,ortheDepartmentactuary’srecommendedcompositeaverage BILLASPASSEDBYTHEHOUSE H.137
1479-2025 Page51of53
1480-increasediffersbylessthantwopercentagepoints,theDepartmentandthe
1481-partiesshallconferbyconferencecall,orbyanyotheravailablemedia,to
1482-reviewtheraterequestsandrecommendations.However,apublichearing
1483-maybeheldattheCommissioner’sdiscretionforgoodcauseshown.
1484-(A)Foranyfilingbyahealthinsurancecompany,hospitalor
1485-medicalserviceorganization,orhealthmaintenanceorganizationwith5,000
1486-ormoretotallivesintheVermontMedicaresupplementinsurancemarketin
1487-whichtherequestedcompositeaveragerateincreaseexceeds10percent,the
1488-Commissionershall:
1489-(i)solicitpubliccomment;and
1490-(ii)holdapublichearinginaccordancewiththeDepartmentof
1491-FinancialRegulation’sapplicablerulesregardingadministrativeprocedures
1492-if,notlaterthan30daysaftertheratefilinginformationispostedonthe
1493-Department’swebsitepursuanttosubsection(a)ofthissection,ahearingis
1494-requestedbytheDepartmentofDisabilities,Aging,andIndependentLiving;
1495-bytheOfficeoftheHealthCareAdvocate;orbynotfewerthan25
1496-policyholderswhosepremiumrateswouldbeaffectedbytherequestedrate
1497-increase.
1498-(B)Foranyfilingthatdoesnotmeetthecriteriaspecifiedin
1499-subdivision(A)ofthissubdivision(3),apublichearingmaybeheldinthe
1500-Commissioner’sdiscretion. BILLASPASSEDBYTHEHOUSE H.137
1501-2025 Page52of53
1502-(C)IntheCommissioner’sdiscretion,ahearingheldpursuanttothis
1503-subdivision(3)maybeconductedthroughadesignatedelectronicmeeting
1504-platform.
1505-(4)Inanyreviewheldinaccordancewiththissubsection,the
1506-CommissionershallpermitinterventionbyanypersonthattheCommissioner
1507-determineswillmateriallyadvancetheinterestsoftheinsuredindividuals.
1508-Theintervenorshallhaveaccessto,andmayusetheinformationofthe
1509-independentexpertappointedunder33V.S.A.§6706.Thereasonableand
1510-necessarycostofinterventionasdeterminedbytheCommissionershallbe
1511-paidbytheaffectedpolicyholdersorcertificateholders.Themaximum
1512-paymentshallbe$2,500.00exceptwhenwaivedbytheCommissionerforgood
1513-causeshown.The$2,500.00maximumamountmaybeadjustedtoreflect,at
1514-theCommissioner’sdiscretion,appropriateinflationfactors.Inanyreview
1515-heldinaccordancewiththissection,theCommissionershallpermit
1516-interventionbyanypersonwhomtheCommissionerdetermineswillmaterially
1517-advancetheinterestsoftheindividualsinsuredunderthepolicy.
1518-(5)Nonproprietary,relevantinformationinanyMedicaresupplement
1519-ratefiling,includinganyanalysisbytheDepartment’sactuaryandthe
1520-independentexpert,shallbemadeavailabletothepublicuponrequest.
1521-(e)ForaMedicaresupplementinsurancepolicywithaneffectivedateof
1522-January1,theinsurershallfileitspremiumraterequestpursuanttothis BILLASPASSEDBYTHEHOUSE H.137
1523-2025 Page53of53
1524-sectionnotlaterthanJuly1oftheprecedingyear.ForaMedicaresupplement
1525-insurancepolicywithaneffectivedateotherthanJanuary1,theinsurershall
1526-fileitsraterequestpursuanttothissectionnotlaterthansixmonthspriorto
1527-theeffectivedateofthepolicy.
1528-Sec.21.REPEAL
1529-33V.S.A.§ 6706(Medicaresupplementinsurance;independentanalysis)is
1530-repealed.
1531-Sec.22.8V.S.A.§ 2577(f)isamendedtoread:
1532-(f)Moratorium.Toprotectthepublicsafetyandwelfareandsafeguardthe
1533-rightsofconsumers,virtual-currencykiosksshallnotbepermittedtooperate
1534-inVermontpriortoJuly1,20252026.Thismoratoriumshallnotapplytoa
1535-virtual-currencykioskthatwasoperationalinVermontonorbeforeJune30,
1536-2024.
1537-Sec.23.EFFECTIVEDATES
1538-ThisactshalltakeeffectonJuly1,2025,exceptthatSecs.20and21
1539-(Medicaresupplementinsurance)shalltakeeffectonJanuary1,2026.
1+BILL AS INTRODUCED H.137
2+2025 Page 1 of 20
3+
4+
5+VT LEG #379566 v.3
6+H.137 1
7+Introduced by Representatives Marcotte of Coventry, Bosch of Clarendon, 2
8+Carris-Duncan of Whitingham, Cooper of Pownal, Duke of 3
9+Burlington, Graning of Jericho, Micklus of Milton, Olson of 4
10+Starksboro, and White of Bethel 5
11+Referred to Committee on 6
12+Date: 7
13+Subject: Insurance; captive insurance; property and casualty; regulation 8
14+Statement of purpose of bill as introduced: This bill proposes to make various 9
15+amendments to Vermont law primarily as it pertains to the regulation of 10
16+insurance products and services subject to the jurisdiction of the Department of 11
17+Financial Regulation. 12
18+An act relating to the regulation of insurance products and services 13
19+It is hereby enacted by the General Assembly of the State of Vermont: 14
20+Sec. 1. 8 V.S.A. § 23 is amended to read: 15
21+§ 23. CONFIDENTIALITY OF INVESTIGATION AND EXAMINATION 16
22+ REPORTS 17
23+(a) This section shall apply to all persons licensed, authorized, or 18
24+registered, or required to be licensed, authorized, or registered, under this title 19
25+or under 9 V.S.A. chapter 150 by the Commissioner. 20 BILL AS INTRODUCED H.137
26+2025 Page 2 of 20
27+
28+
29+VT LEG #379566 v.3
30+(b) Regardless of source, all records of investigations, including 1
31+information pertaining to a complaint by or for a consumer, and all records and 2
32+reports of examinations by the Commissioner, whether in the possession of a 3
33+supervisory agency or another person, shall be confidential and privileged, 4
34+shall not be made public, and shall not be subject to discovery or introduction 5
35+into evidence in any private civil action. No person who participated on behalf 6
36+of the Commissioner in an investigation or examination shall be permitted or 7
37+required to testify in any such civil action as to any findings, 8
38+recommendations, opinions, results, or other actions relating to the 9
39+investigation or examination. 10
40+(c) The Commissioner may, in his or her the Commissioner’s discretion, 11
41+disclose or publish or authorize the disclosure or publication of any such 12
42+record or report or any part thereof in the furtherance of legal or regulatory 13
43+proceedings brought as a part of the Commissioner’s official duties. The 14
44+Commissioner may, in his or her the Commissioner’s discretion, disclose or 15
45+publish or authorize the disclosure or publication of any such record or report 16
46+or any part thereof, to civil or criminal law enforcement authorities for use in 17
47+the exercise of such authority’s duties, in such manner as the Commissioner 18
48+may deem proper. 19
49+(d) For the purposes of this section, records of investigations and records 20
50+and reports of examinations shall include joint examinations by the 21 BILL AS INTRODUCED H.137
51+2025 Page 3 of 20
52+
53+
54+VT LEG #379566 v.3
55+Commissioner and any other supervisory agency. Records of investigations 1
56+and reports of examinations shall also include records of examinations and 2
57+investigations conducted by: 3
58+(1) any agency with supervisory jurisdiction over the person; and 4
59+(2) any agency of any foreign government with supervisory jurisdiction 5
60+over any person subject to the jurisdiction of the Department, when such 6
61+records are considered confidential by such agency or foreign government and 7
62+the records are in the possession of the Commissioner. 8
63+Sec. 2. 8 V.S.A. § 3303 is amended to read: 9
64+§ 3303. MUTUAL COMPANIES; DIREC TORS, CHARTER PROVISIONS 10
65+ AS TO 11
66+The articles of association or bylaws of a mutual insurer shall set forth the 12
67+manner in which its board of directors or other governing body shall be 13
68+elected, and in which meetings of policyholders shall be called, held, and 14
69+conducted, subject to such procedures as may be required by the 15
70+Commissioner under section 75 subsection 15(a) of this title. 16
71+Sec. 3. 8 V.S.A. § 4688(a) is amended to read: 17
72+(a) Filings as to competitive markets. Except with respect to filings 18
73+submitted pursuant to section 4687 of this title, in a competitive market, every 19
74+insurer shall file with the Commissioner all rates and supplementary rate 20
75+information, and supporting information that are to be used in this State, 21 BILL AS INTRODUCED H.137
76+2025 Page 4 of 20
77+
78+
79+VT LEG #379566 v.3
80+provided that such rates and information need not be filed for specifically rated 1
81+inland marine risks or such other risks that are designated by regulation of the 2
82+Commissioner as not requiring a filing. Such rates, supplementary rate 3
83+information, and supporting information shall be provided to the 4
84+Commissioner not later than 15 days after 30 days prior to the effective date. 5
85+An insurer may adopt by reference, with or without deviation or modification, 6
86+provided that said deviation or modification is readily identifiable, the rates, 7
87+supplementary rate information, and supporting information filed by another 8
88+insurer or an advisory or service organization with which it is affiliated; 9
89+provided, however, such an adoption shall not relieve an insurer from any 10
90+other requirements of this chapter. 11
91+Sec. 4. 8 V.S.A. § 4685a is added to read: 12
92+§ 4685a. AFFORDABLE HOUSING INSURANCE; UNFAIR 13
93+ DISCRIMINATION 14
94+(a) An insurer that issues or delivers in this State a policy of insurance 15
95+covering loss of or damage to real property containing units for residential 16
96+purposes or legal liability of an owner or renter of such real property shall not 17
97+inquire about on an application, nor shall an insurer cancel, refuse to issue, 18
98+refuse to renew, or increase the premium of a policy, or exclude, limit, restrict, 19
99+or reduce coverage under a policy based on, the following: 20 BILL AS INTRODUCED H.137
100+2025 Page 5 of 20
101+
102+
103+VT LEG #379566 v.3
104+(1) whether the residential building contains dwelling units that are 1
105+required to be affordable to residents at a specific income level pursuant to a 2
106+statute, regulation, restrictive declaration, or regulatory agreement with a local, 3
107+State, or federal government entity; 4
108+(2) whether the real property owner or tenants of such residential 5
109+building or the shareholders of a cooperative housing corporation receive 6
110+rental assistance provided by a local, State, or federal government entity, 7
111+including the receipt of federal vouchers issued under Section 8 of the U.S. 8
112+Housing Act of 1937, 42 U.S.C. § 1437f; 9
113+(3) the level or source of income of the tenants of the residential 10
114+building or the shareholders of a cooperative housing corporation; or 11
115+(4) whether the residential building is owned by a limited-equity 12
116+cooperative, public housing agency, or cooperative housing corporation. 13
117+(b) Nothing in this section shall prohibit an insurer from cancelling, 14
118+refusing to issue, refusing to renew, or increasing the premium of an insurance 15
119+policy, or excluding, limiting, restricting, or reducing coverage under a policy, 16
120+due to other factors that are permitted or not prohibited by any other section of 17
121+this chapter. 18
122+Sec. 5. 8 V.S.A. § 6002(a) is amended to read: 19
123+(a) Any captive insurance company, when permitted by its articles of 20
124+association, charter, or other organizational document, may apply to the 21 BILL AS INTRODUCED H.137
125+2025 Page 6 of 20
126+
127+
128+VT LEG #379566 v.3
129+Commissioner for a license to do any and all conduct insurance business 1
130+comprised in subdivisions 3301(a)(1), (2), (3)(A)-(C), (E)-(Q), and (4)-(9) 2
131+section 3301 of this title and may grant annuity contracts as defined in section 3
132+3717 of this title and may accept or transfer risk by means of a parametric 4
133+contract; provided, however, that: 5
134+(1) No pure captive insurance company may insure any risks other than 6
135+those of its parent and affiliated companies or controlled unaffiliated business. 7
136+(2) No agency captive insurance company may do any insurance 8
137+business in this State unless: 9
138+(A) an insurance agency or brokerage that owns or controls the 10
139+agency captive insurance company remains in regulatory good standing in all 11
140+states in which it is licensed; 12
141+(B) it insures only the risks of the commercial policies that are placed 13
142+by or through an insurance agency or brokerage that owns or directly or 14
143+indirectly controls the agency captive insurance company and, if required by 15
144+the Commissioner in his or her the Commissioner’s discretion, it provides the 16
145+Commissioner the form of such commercial policies; 17
146+(C) it discloses to the original policyholder or policyholders, in a 18
147+form or manner approved by the Commissioner, that the agency captive 19
148+insurance company as a result of its affiliation with an insurance agency or 20 BILL AS INTRODUCED H.137
149+2025 Page 7 of 20
150+
151+
152+VT LEG #379566 v.3
153+brokerage may enter into a reinsurance or other risk-sharing agreement with 1
154+the agency or brokerage; and 2
155+(D) if required by the Commissioner in his or her the 3
156+Commissioner’s discretion, the business written by an agency captive 4
157+insurance company is: 5
158+(i) Fronted by an insurance company licensed under the laws of 6
159+any state. 7
160+(ii) Reinsured by a reinsurer authorized or approved by the State 8
161+of Vermont. 9
162+(iii) Secured by a trust fund in the United States for the benefit of 10
163+policyholders and claimants or funded by an irrevocable letter of credit or 11
164+other arrangement that is acceptable to the Commissioner. The Commissioner 12
165+may require the agency captive insurance company to increase the funding of 13
166+any security arrangement established under this subdivision. If the form of 14
167+security is a letter of credit, the letter of credit shall be issued or confirmed by a 15
168+bank approved by the Commissioner. A trust maintained pursuant to this 16
169+subdivision shall be established in a form and upon terms approved by the 17
170+Commissioner. 18
171+(3) No association captive insurance company may insure any risks 19
172+other than those of its association, those of the member organizations of its 20
173+association, and those of a member organization’s affiliated companies. 21 BILL AS INTRODUCED H.137
174+2025 Page 8 of 20
175+
176+
177+VT LEG #379566 v.3
178+(4) No industrial insured captive insurance company may insure any 1
179+risks other than those of the industrial insureds that comprise the industrial 2
180+insured group, those of their affiliated companies, and those of the controlled 3
181+unaffiliated business of an industrial insured or its affiliated companies. 4
182+(5) No risk retention group may insure any risks other than those of its 5
183+members and owners. 6
184+(6) No captive insurance company may provide personal motor vehicle 7
185+or homeowner’s insurance coverage or any component thereof. 8
186+(7) No captive insurance company may accept or cede reinsurance 9
187+except as provided in section 6011 of this title. 10
188+(8) Any captive insurance company may provide excess workers’ 11
189+compensation insurance to its parent and affiliated companies, unless 12
190+prohibited by the federal law or laws of the state having jurisdiction over the 13
191+transaction. Any captive insurance company, unless prohibited by federal law, 14
192+may reinsure workers’ compensation of a qualified self-insured plan of its 15
193+parent and affiliated companies. 16
194+(9) Any captive insurance company that insures risks described in 17
195+subdivisions 3301(a)(1) and (2) of this title shall comply with all applicable 18
196+State and federal laws. 19 BILL AS INTRODUCED H.137
197+2025 Page 9 of 20
198+
199+
200+VT LEG #379566 v.3
201+(10) Any captive insurance company that transfers risk by means of a 1
202+parametric contract shall comply with all applicable State and federal laws and 2
203+regulations. 3
204+Sec. 6. 8 V.S.A. § 6004(d) is amended to read: 4
205+(d) Within 30 days after commencing business, each captive insurance 5
206+company shall file with the Commissioner a statement under oath of its 6
207+president and secretary or two individuals authorized by the governing board 7
208+certifying that the captive insurance company possessed the requisite 8
209+unimpaired, paid-in capital and surplus prior to commencing business. 9
210+Sec. 7. 8 V.S.A. § 6006 is amended to read: 10
211+§ 6006. FORMATION OF CAPTIVE INSURANCE COMPANIES IN THIS 11
212+ STATE 12
213+* * * 13
214+(h) Other than captive insurance companies formed as limited liability 14
215+companies under 11 V.S.A. chapter 21 chapter 25 or as nonprofit corporations 15
216+under Title 11B, captive insurance companies formed as corporations under the 16
217+provisions of this chapter shall have the privileges and be subject to the 17
218+provisions of Title 11A as well as the applicable provisions contained in this 18
219+chapter. In the event of conflict between the provisions of said general 19
220+corporation law and the provisions of this chapter, the latter shall control. 20 BILL AS INTRODUCED H.137
221+2025 Page 10 of 20
222+
223+
224+VT LEG #379566 v.3
225+(i) Captive insurance companies formed under the provisions of this 1
226+chapter: 2
227+(1) As limited liability companies shall have the privileges and be 3
228+subject to the provisions of 11 V.S.A. chapter 21 chapter 25 as well as the 4
229+applicable provisions contained in this chapter. In the event of a conflict 5
230+between the provisions of 11 V.S.A. chapter 21 chapter 25 and the provisions 6
231+of this chapter, the latter shall control. 7
232+(2) As nonprofit corporations shall have the privileges and be subject to 8
233+the provisions of Title 11B as well as the applicable provisions contained in 9
234+this chapter. In the event of conflict between the provisions of Title 11B and 10
235+the provisions of this chapter, the latter shall control. 11
236+(3) As mutual insurers shall have the privileges and be subject to the 12
237+provisions of sections 3303 and 3311 of this title as well as the applicable 13
238+provisions contained in this chapter. In the event of a conflict between the 14
239+provisions of sections 3303 and 3311 of this title and the provisions of this 15
240+chapter, the latter shall control. 16
241+* * * 17
242+Sec. 8. 8 V.S.A. § 6006a(a) is amended to read: 18
243+(a) Any captive insurance company meeting the qualifications set forth in 19
244+subdivision 6006(j)(1) of this title may merge with any other insurer, whether 20
245+licensed in this State or elsewhere, in the following manner: 21 BILL AS INTRODUCED H.137
246+2025 Page 11 of 20
247+
248+
249+VT LEG #379566 v.3
250+(1) The board of directors of each insurer shall, by a resolution adopted 1
251+by a majority vote of the members of such board, approve a joint agreement of 2
252+merger setting forth: 3
253+(A) the names of the insurers proposed to merge, and the name of the 4
254+insurer into which they propose to merge, which is hereafter designated as the 5
255+surviving company; 6
256+(B) the terms and conditions of the proposed merger and the mode of 7
257+carrying the same into effect; 8
258+(C) the manner and basis of converting the ownership interests, if 9
259+applicable, in other than the surviving insurer into ownership interests or other 10
260+consideration, securities, or obligations of the surviving insurer; 11
261+(D) a restatement of such provisions of the articles of incorporation 12
262+of the surviving insurer as may be deemed necessary or advisable to give effect 13
263+to the proposed merger; and 14
264+(E) any other provisions with respect to the proposed merger as are 15
265+deemed necessary or desirable. 16
266+(2) The resolution of the board of directors of each insurer approving the 17
267+agreement shall direct that the agreement be submitted to a vote of the 18
268+shareholders, members, or policyholders, as the case may be, of each insurer 19
269+entitled to vote in respect thereof at a designated meeting thereof, or via 20
270+unanimous written consent of such shareholders, members, or policyholders in 21 BILL AS INTRODUCED H.137
271+2025 Page 12 of 20
272+
273+
274+VT LEG #379566 v.3
275+lieu of a meeting. Notice of the meeting shall be given as provided in the 1
276+bylaws, charter, or articles of association, or other governance document, as 2
277+the case may be, of each insurer and shall specifically reflect the agreement as 3
278+a matter to be considered at the meeting. 4
279+(3) The agreement of merger so approved shall be submitted to a vote of 5
280+the shareholders, members, or policyholders, as the case may be, of each 6
281+insurer entitled to vote in respect thereof at the meeting directed by the 7
282+resolution of the board of directors of such company approving the agreement, 8
283+and the agreement shall be unanimously adopted by the shareholders, 9
284+members, or policyholders, as the case may be. 10
285+(4) Following the adoption of the agreement by any insurer, articles of 11
286+merger shall be adopted in the following manner: 12
287+(A) Upon the execution of the agreement of merger by all of the 13
288+insurers parties thereto, there shall be executed and filed, in the manner 14
289+hereafter provided, articles of merger setting forth the agreement of merger, the 15
290+signatures of the several insurers parties thereto, the manner of its adoption, 16
291+and the vote by which adopted by each insurer. 17
292+(B) The articles of merger shall be signed on behalf of each insurer 18
293+by a duly authorized officer or individual authorized by the governing board, in 19
294+such multiple copies as shall be required to enable the insurers to comply with 20 BILL AS INTRODUCED H.137
295+2025 Page 13 of 20
296+
297+
298+VT LEG #379566 v.3
299+the provisions of this subchapter with respect to filing and recording the 1
300+articles of merger, and shall then be presented to the Commissioner. 2
301+(C) The Commissioner shall approve the articles of merger if he or 3
302+she the Commissioner finds that the merger will promote the general good of 4
303+the State in conformity with those standards set forth in section 3305 of this 5
304+title. If he or she the Commissioner approves the articles of merger, he or she 6
305+the Commissioner shall issue a certificate of approval of merger. 7
306+(5) The insurer shall file the articles of merger, accompanied by the 8
307+agreement of merger and the certificate of approval of merger, with the 9
308+Secretary of State and pay all fees as required by law. If the Secretary of State 10
309+finds that they conform to law, he or she the Secretary shall issue a certificate 11
310+of merger and return it to the surviving insurer or its representatives. The 12
311+merger shall take effect upon the filing of articles of merger with the Secretary 13
312+of State, unless a later effective date is specified therein. 14
313+(6) The surviving insurer shall file a copy of the certificate of merger 15
314+from the Secretary of State with the Commissioner. 16
315+Sec. 9. 8 V.S.A. § 6007(b) is amended to read: 17
316+(b) Prior to March 1 of each year, and prior to March 15 of each year in the 18
317+case of pure captive insurance companies, association captive insurance 19
318+companies, sponsored captive insurance companies, industrial insured captive 20
319+insurance companies, or agency captive insurance companies, each captive 21 BILL AS INTRODUCED H.137
320+2025 Page 14 of 20
321+
322+
323+VT LEG #379566 v.3
324+insurance company shall submit to the Commissioner a report of its financial 1
325+condition, verified by oath of two of its executive officers or two individuals 2
326+authorized by the governing board. Each captive insurance company shall 3
327+report using generally accepted accounting principles, statutory accounting 4
328+principles, or international financial reporting standards unless the 5
329+Commissioner requires, approves, or accepts the use of any other 6
330+comprehensive basis of accounting, in each case with any appropriate or 7
331+necessary modifications or adaptations thereof required or approved or 8
332+accepted by the Commissioner for the type of insurance and kinds of insurers 9
333+to be reported upon, and as supplemented by additional information required 10
334+by the Commissioner. As used in this section, statutory accounting principles 11
335+shall mean the accounting principles codified in the NAIC Accounting 12
336+Practices and Procedures Manual. Upon application for admission, a captive 13
337+insurance company shall select, with explanation, an accounting method for 14
338+reporting. Any change in a captive insurance company’s accounting method 15
339+shall require prior approval. Except as otherwise provided, each risk retention 16
340+group shall file its report in the form required by subsection 3561(a) of this 17
341+title, and each risk retention group shall comply with the requirements set forth 18
342+in section 3569 of this title. The Commissioner shall by rule propose the forms 19
343+in which pure captive insurance companies, association captive insurance 20
344+companies, sponsored captive insurance companies, and industrial insured 21 BILL AS INTRODUCED H.137
345+2025 Page 15 of 20
346+
347+
348+VT LEG #379566 v.3
349+captive insurance companies shall report. Subdivision 6002(c)(3) of this title 1
350+shall apply to each report filed pursuant to this section, except that such 2
351+subdivision shall not apply to reports filed by risk retention groups. 3
352+Sec. 10. 8 V.S.A. § 6011(a) is amended to read: 4
353+(a) Any captive insurance company may provide reinsurance, of policies 5
354+approved by the Commissioner comprised in subsection 3301(a) section 3301 6
355+of this title, on risks of its parent, affiliated companies, and controlled 7
356+unaffiliated business ceded by any other insurer, and may provide reinsurance 8
357+of annuity contracts as defined in section 3717 of this title that are granted by 9
358+any other insurer. 10
359+Sec. 11. 8 V.S.A. § 6024(c) is amended to read: 11
360+(c) A dormant captive insurance company that has been issued a certificate 12
361+of dormancy shall: 13
362+(1) possess and thereafter maintain unimpaired, paid-in capital and 14
363+surplus of not less than $25,000.00; provided, however, that if the dormant 15
364+captive insurance company had never capitalized, it shall not be required to 16
365+add capital upon entering dormancy; 17
366+(2) prior to March 15 of each year, submit to the Commissioner a report 18
367+of its financial condition, verified by oath of two of its executive officers or 19
368+individuals authorized by its governing board, in a form as may be prescribed 20
369+by the Commissioner; and 21 BILL AS INTRODUCED H.137
370+2025 Page 16 of 20
371+
372+
373+VT LEG #379566 v.3
374+(3) pay a license renewal fee of $500.00. 1
375+Sec. 12. 8 V.S.A. § 6045 is amended to read: 2
376+§ 6045. BRANCH CAPTIVE REPORTS 3
377+Prior to March 15 of each year, or with the approval of the Commissioner 4
378+within 75 days after its fiscal year-end, a branch captive insurance company 5
379+shall file with the Commissioner a copy of all reports and statements required 6
380+to be filed under the laws of the jurisdiction in which the alien captive 7
381+insurance company is formed, verified by oath of two of its executive officers 8
382+or individuals authorized by the governing board. If the Commissioner is 9
383+satisfied that the annual report filed by the alien captive insurance company in 10
384+its domiciliary jurisdiction provides adequate information concerning the 11
385+financial condition of the alien captive insurance company, the Commissioner 12
386+may waive the requirement for completion of the captive annual statement for 13
387+business written in the alien jurisdiction. 14
388+Sec. 13. 8 V.S.A. § 6048d(c)(2) is amended to read: 15
389+(2) The special purpose financial insurance company shall submit an 16
390+affidavit of its president, a vice president, the treasurer, or the chief financial 17
391+officer, or an individual authorized by the governing board that includes the 18
392+following statements, to the best of such person’s knowledge and belief after 19
393+reasonable inquiry: 20 BILL AS INTRODUCED H.137
394+2025 Page 17 of 20
395+
396+
397+VT LEG #379566 v.3
398+(A) the proposed organization and operation of the special purpose 1
399+financial insurance company comply with all applicable provisions of this 2
400+chapter; 3
401+(B) the special purpose financial insurance company’s investment 4
402+policy reflects and takes into account the liquidity of assets and the reasonable 5
403+preservation, administration, and management of such assets with respect to 6
404+the risks associated with the reinsurance contract and the insurance 7
405+securitization transaction; and 8
406+(C) the reinsurance contract and any arrangement for securing the 9
407+special purpose financial insurance company’s obligations under such 10
408+reinsurance contract, including any agreements or other documentation to 11
409+implement such arrangement, comply with the provisions of this subchapter. 12
410+Sec. 14. 8 V.S.A. § 6052(g) is amended to read: 13
411+(g) This subsection establishes governance standards for a risk retention 14
412+group. 15
413+(1) As used in this subsection: 16
414+(A) “Board of directors” or “board” means the governing body of a 17
415+risk retention group elected by risk retention group members to establish 18
416+policy, elect or appoint officers and committees, and make other governing 19
417+decisions. 20 BILL AS INTRODUCED H.137
418+2025 Page 18 of 20
419+
420+
421+VT LEG #379566 v.3
422+(B) “Director” means a natural person designated in the articles of 1
423+the risk retention group or designated, elected, or appointed by any other 2
424+manner, name, or title to act as a member of the governing body of the risk 3
425+retention group. 4
426+(C)(i) “Independent director” means a director who does not have a 5
427+material relationship with the risk retention group. A director has a material 6
428+relationship with a risk retention group if he or she the director, or a member of 7
429+his or her the director’s immediate family: 8
430+(I)(i) In any 12-month period, receives from the risk retention 9
431+group, or from a consultant or service provider to the risk retention group, 10
432+compensation or other item or items of value in an amount equal to or greater 11
433+than five percent of the risk retention group’s gross written premium or two 12
434+percent of the risk retention group’s surplus, as measured at the end of any 13
435+fiscal quarter falling in such 12-month period, whichever is greater. This 14
436+provision also applies to compensation or items of value received by any 15
437+business with which the director is affiliated. Such material relationship shall 16
438+continue for one year after receipt of the item or items of value or the 17
439+compensation falls below the threshold established in this subdivision. 18
440+(II)(ii) Has a relationship with an auditor as follows: Is affiliated 19
441+with or employed in a professional capacity by a current or former internal or 20 BILL AS INTRODUCED H.137
442+2025 Page 19 of 20
443+
444+
445+VT LEG #379566 v.3
446+external auditor of the risk retention group. Such material relationship shall 1
447+continue for one year after the affiliation or employment ends. 2
448+(aa)(iii) Is employed as an executive officer of another business 3
449+entity that is affiliated with the risk retention group by virtue of common 4
450+ownership and control, if such entity meets all of the following criteria: 5
451+(AA)(I) the entity is not an insured of the risk retention group; 6
452+(BB)(II) the entity has a contractual relationship with the risk 7
453+retention group; and 8
454+(CC)(III) the governing board of the entity includes executive 9
455+officers of the risk retention group, unless a majority of the membership of 10
456+such entity’s governing board is composed of individuals who are members of 11
457+the governing board of the risk retention group. 12
458+(bb)(IV) Such material relationship shall continue until the 13
459+employment or service ends. 14
460+(ii)(iv) Notwithstanding subdivision (i) subdivisions (i)–(iii) of 15
461+this subdivision (g)(1)(C), a director who is a direct or indirect owner of the 16
462+risk retention group is deemed to be independent; and an officer, director, or 17
463+employee of an insured of the risk retention group is deemed to be 18
464+independent, unless some other relationship of such officer, director, or 19
465+employee qualifies as a material relationship. 20 BILL AS INTRODUCED H.137
466+2025 Page 20 of 20
467+
468+
469+VT LEG #379566 v.3
470+(D) “Material service provider” includes a captive manager, auditor, 1
471+accountant, actuary, investment advisor, attorney, managing general 2
472+underwriter, or other person responsible for underwriting, determination of 3
473+rates, premium collection, claims adjustment or settlement, or preparation of 4
474+financial statements, whose aggregate annual contract fees are equal to or 5
475+greater than five percent of the risk retention group’s annual gross written 6
476+premium or two percent of its surplus, whichever is greater. It does not mean 7
477+defense counsel retained by a risk retention group, unless his or her the defense 8
478+counsel’s annual fees have been equal to or greater than five percent of a risk 9
479+retention group’s annual gross premium or two percent of its surplus, 10
480+whichever is greater, during three or more of the previous five years. 11
481+* * * 12
482+(9) The president or, chief executive officer, or individual authorized by 13
483+the board of directors of a risk retention group shall promptly notify the 14
484+Commissioner in writing of any known material noncompliance with the 15
485+governance standards established in this subsection. 16
486+Sec. 15. EFFECTIVE DATE 17
487+This act shall take effect on passage. 18