The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
Subchapter
003
:
BRANCH CAPTIVE INSURANCE COMPANIES
(Cite as: 8 V.S.A. § 6043)
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[Section 6043 shall apply to branch captive companies formed before January 1, 2009.]
§ 6043. Security required
In the case of a branch captive insurance company, as security for the payment of
liabilities attributable to the branch operations, the Commissioner shall require
that either a trust fund funded by assets acceptable to the Commissioner or an irrevocable
letter of credit be established and maintained in the United States for the benefit
of U.S. policyholders and U.S. ceding insurers under insurance policies issued or
reinsurance contracts issued or assumed by the branch captive insurance company through
its branch operations. The amount of such security may be no less than the amount
set forth in subdivision 6004(a)(1) of this title and the reserves on such insurance policies or such reinsurance contracts, including
reserves for losses, allocated loss adjustment expenses, incurred but not reported
losses, and unearned premiums with regard to business written through the branch operations;
provided, however, the Commissioner may permit a branch captive insurance company
that is required to post security for loss reserves on branch business by its reinsurer
to reduce the funds in the trust account or the amount payable under the irrevocable
letter of credit required by this section by the same amount so long as the security
remains posted with the reinsurer. If the form of security selected is a letter of
credit, the letter of credit must be established by, or issued or confirmed by, a
bank chartered in this State or a member bank of the Federal Reserve System. (Added 2003, No. 55, § 9; amended 2005, No. 36, § 15, eff. June 1, 2005; 2009, No. 42, § 25, eff. May 27, 2009.)
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[Section 6043 shall apply only to branch captive companies formed on and after January
1, 2009.]
§ 6043. Security required
(a) No branch captive insurance company shall be issued a license unless it shall possess
and thereafter maintain, as security for the payment of liabilities attributable to
the branch operations:
(1) an amount equal to the amount set forth in subdivision 6004(a)(1) of this title as the minimum capital requirement for a pure captive; and in addition
(2) reserves on such insurance policies or such reinsurance contracts as may be issued
or assumed by the branch captive insurance company through its branch operations,
including reserves for losses, allocated loss adjustment expenses, incurred but not
reported losses, and unearned premiums with regard to business written through the
branch operations; provided, however, the Commissioner may permit a branch captive
insurance company to credit against any such reserve requirement any security for
loss reserves that the branch captive insurance company may post with a ceding insurer
or that may be posted by a reinsurer with the branch captive insurance company, in
either case so long as such security remains posted.
(b) Subject to the prior approval of the Commissioner, the amounts required in subsection
(a) of this section may be held in the form of:
(1) a trust formed under a trust agreement and funded by assets acceptable to the Commissioner;
(2) an irrevocable letter of credit issued or confirmed by a bank approved by the Commissioner;
(3) with respect to the amounts required in subdivision (a)(1) of this section only, cash
on deposit with the Commissioner; or
(4) any combination thereof. (Added 2003, No. 55, § 9; amended 2005, No. 36, § 15, eff. June 1, 2005; 2009, No. 42, § 25, eff. May 27, 2009.)