| Insurance Management |
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Vermont - State Background
One of the smallest and most rural states, Vermont is a mountainous region with large rivers and valleys. The state's name is derived from: Ver, from the French word for green, vert; and -mont from mountain.
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Tourists have discovered the state's natural beauty, ski slopes, and small town character. Vermont's industry ranges from production of electronic components and equipment, machine tools, specialty products, quarried and finished stone, and printing. Vermont is America's largest producer of maple syrup.
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General Information
Applicable Legislation
In 1981, Vermont passed the 'Special Insurer Act', which made the state a captive domicile. Laws and Regulations related to Vermont captives are codified in Title 8 of the Vermont Statutes and Captive Insurance Regulations 81-2 and 99-2.
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Regulatory Environment
The Vermont Department of Banking, Insurance and Securities and Health Care Administration regulates all insurance companies in Vermont.
General Requirements
- Acceptable insurance subsidiaries include pure or single parent captive reinsurance company, sponsored captive insurance company (using protected cells), special purpose insurance company, branch captive, or industrial insured captive insurance company;
- pure captives can only insure risks of its parent, affiliated companies and/or controlled unaffiliated business;
- principal office and records maintained in Vermont; and
- district examination every three years.
Annual Requirements
- Premium tax on Direct Premium Written
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38/100 of 1%
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0-$20,000,000
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285/1000 of 1%
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$20,000,000 - $40,000,000
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19/100 of 1%
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$40,000,000 - $60,000,000
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72/1000 of 1%
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$60,000,000 and over
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- Premium tax on Assumed Reinsurance Premium
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225/1000 of 1%
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0- $20,000,000
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150/1000 of 1%
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$20,000,000 - $40,000,000
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50/1000 of 1%
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$40,000,000 - $60,000,000
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25/1000 of 1%
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$60,000,000 and over
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The annual minimum aggregate premium tax is $7,500.00 and the maximum aggregate premium tax is $200,000.00.
- Captive annual report;
- annual audit by CPA firm;
- accountant's letter of qualifications;
- annual actuarial certification; and
- direct economic impact statement
Minimum Capitalisation and Surplus
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Pure Captive
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$250,000
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Association Captive
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$750,000
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Industrial Insured Captive
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$500,000
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Risk Retention Group
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$1,000,000
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Sponsored Captive
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$500,000
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Letters of credit acceptable
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Permissible Lines of Business
Nearly all commercial property/casualty lines of business.
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Range
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Low
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High
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Application Costs (non-recurring regulatory and legal)
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USD 3,400
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USD 3,400
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Annual Government Fee
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USD 300
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USD 300
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Premium Taxes
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See General Information - Annual requirements
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Annual Management Fees
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USD 25,000
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Dependent on work involved
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The information in this document is intended as a general overview of jurisdictional requirements at the time of publication. It is not to be construed as legal advice or opinion and persons reading this publication are advised to obtain independent legal, accounting or tax advice on this regard.
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