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The Vermont Statutes Online

 

Title 8 : Banking and Insurance

Chapter 141 : CAPTIVE INSURANCE COMPANIES

Subchapter 001 : GENERAL PROVISIONS

(Cite as: 8 V.S.A. § 6010)
  • § 6010. Legal investments

    (a)(1) Except as may be otherwise authorized by the Commissioner, agency captive insurance companies, association captive insurance companies, and risk retention groups shall:

    (A) comply with the investment requirements contained in sections 3461 through 3472 of this title, as applicable; or

    (B) submit for approval by the Commissioner the investment policy of the company. In reviewing the investment policy, the Commissioner shall consider diversification as to both type and issue; limits on the aggregate investment that may be made in any category of investment; limits on the aggregate investment in any one business, issuer, or risk; liquidity; and matching of assets and liabilities. The Commissioner shall determine whether the investment policy provides for the reasonable preservation, administration, and management of assets with respect to the risks associated with the company's transactions and whether the investment policy supports the approved business plan. Subdivision 6002(c)(3) of this title shall apply to all information submitted pursuant to this subsection.

    (2) The Commissioner may require any company subject to this subsection to limit or withdraw from certain investments or discontinue certain investment practices if the Commissioner determines that such investments or practices of the company might be hazardous to the policyholders or the general public.

    (3) Section 3463a of this title shall apply to agency captive insurance companies, association captive insurance companies, and risk retention groups except to the extent it is inconsistent with approved accounting standards in use by the company. Notwithstanding any other provision of this title to the contrary, the Commissioner may approve the use of alternative, reliable methods of valuation and rating.

    (b) No pure captive insurance company or industrial insured captive insurance company shall be subject to any restrictions on allowable investments, including those limitations contained in sections 3461-3472 of this title; provided, however, that the Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of any such company.

    (c) No pure captive insurance company may make a loan to or an investment in its parent company or affiliates without prior written approval of the Commissioner, and any such loan or investment must be evidenced by documentation approved by the Commissioner. Loans of minimum capital and surplus funds required by section 6004 of this title are prohibited. (Added 1981, No. 28; amended 1991, No. 101, § 20; 1993, No. 40, § 6, eff. June 3, 1993; 1993, No. 235 (Adj. Sess.), § 9h, eff. June 21, 1994; 1999, No. 38, § 12, eff. May 20, 1999; 2001, No. 71, § 13, eff. June 16, 2001; 2003, No. 55, § 7; 2005, No. 36, § 14, eff. June 1, 2005; 2017, No. 12, § 7, eff. May 1, 2017; 2019, No. 3, § 4, eff. April 18, 2019.)