§ 6034c. Protected cell conversion
(a)(1) Subject to the prior written approval of the Commissioner, on application of the sponsor
and with the prior consent of each participant of the affected protected cells or
as otherwise permitted pursuant to a participation agreement and the consent of each
affected incorporated protected cell, a sponsored captive insurance company or a sponsored
captive insurance company licensed as a special purpose financial insurance company
may convert one or more protected cells or incorporated protected cells into a:
(A) single protected cell or incorporated protected cell;
(B) new sponsored captive insurance company;
(C) new sponsored captive insurance company licensed as a special purpose financial insurance
company;
(D) new special purpose financial insurance company;
(E) new pure captive insurance company;
(F) new risk retention group;
(G) new agency captive insurance company;
(H) new industrial insured captive insurance company; or
(I) new association captive insurance company.
(2) Any such conversion shall be subject to section 6031 and subchapters 1 and 4 of this
chapter, as applicable, as well as to a plan or plans of operation approved by the
Commissioner, without affecting any protected cell’s or incorporated protected cell’s
assets, rights, benefits, obligations, and liabilities.
(b) Any such conversion shall be deemed for all purposes to be a continuation of each
such protected cell’s or incorporated protected cell’s existence together with all
of its assets, rights, benefits, obligations, and liabilities, as a new protected
cell or incorporated protected cell, a licensed sponsored captive insurance company,
a sponsored captive insurance company licensed as a special purpose financial insurance
company, a pure captive insurance company, a risk retention group, an industrial insured
captive insurance company, or an association captive insurance company, as applicable.
Any such conversion shall be deemed to occur without any transfer or assignment of
any such assets, rights, benefits, obligations, or liabilities and without the creation
of any reversionary interest in, or impairment of, any such assets, rights, benefits,
obligations, and liabilities.
(c) Any such conversion shall not be construed to limit any rights or protections applicable
to any converted protected cell or incorporated protected cell and such sponsored
captive insurance company or sponsored captive insurance company licensed as a special
purpose financial insurance company under this subchapter or under subchapter 4 of
this chapter, as applicable, that existed immediately prior to the date of any such
conversion.
(d)(1) Any protected cell converting into an incorporated protected cell pursuant to this
section, or converting into a new captive insurance company or risk retention group
pursuant to this section, shall perform such conversion in accordance with:
(A) the provisions of 11A V.S.A. chapter 11 if the converted entity is to be a corporation;
(B) the provisions of 11 V.S.A. chapter 25, subchapter 10 if the converted entity is to
be a limited liability company; or
(C) the provisions applicable to any other type of entity permissible under Vermont law
if the converted entity is to be such an entity.
(2) As used in this subdivision, a protected cell that is not an incorporated protected
cell shall be considered an “organization” as that term is defined in 11A V.S.A. § 11.01 and 11 V.S.A. § 4141; an “other insurer” as that term is defined in 8 V.S.A. § 6020; and an “entity” as that term is defined in 11C V.S.A. § 102. (Added 2015, No. 74 (Adj. Sess.), § 3, eff. April 13, 2016; amended 2019, No. 110 (Adj. Sess.), § 5, eff. June 15, 2020; 2021, No. 25, § 24, eff. May 12, 2021.)