§ 6032. Definitions

As used in this subchapter, unless the context requires otherwise:

(1) “General account” means all assets and liabilities of the sponsored captive insurance company not attributable to a protected cell.

(2) “Incorporated protected cell” means a protected cell that, subject to the approval of the Commissioner, is formed as any type of entity permissible under Vermont law, separate from the sponsored captive insurance company of which it is a part.

(3) “Participant” means an entity as defined in section 6036 of this title, and any affiliates thereof, that are insured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to such participant’s pro rata share of the assets of one or more protected cells identified in such participant contract.

(4) “Participant contract” means a contract by which a sponsored captive insurance company insures the risks of a participant and limits the losses of each such participant to its pro rata share of the assets of one or more protected cells identified in such participant contract.

(5) “Protected cell” means a separate account established by a sponsored captive insurance company formed or licensed under the provisions of this chapter, in which assets are maintained for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company assumed on behalf of such participants as set forth in such participant contracts, and shall include an “incorporated protected cell,” as defined in this section.

(6) “Sponsor” means any entity that meets the requirements of section 6035 of this title and is approved by the Commissioner to provide all or part of the capital and surplus required by applicable law and to organize and operate a sponsored captive insurance company.

(7) “Sponsored captive insurance company” means any captive insurance company:

(A) in which the minimum capital and surplus required by applicable law is provided by one or more sponsors;

(B) that is formed or licensed under the provisions of this chapter;

(C) that insures the risks only of its participants or, subject to Commissioner approval, other parties unaffiliated with a participant, through separate participant contracts; and

(D) that funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the sponsored captive insurance company’s general account. (Added 2003, No. 55, § 9; amended 2011, No. 21, § 21; 2011, No. 78 (Adj. Sess.), § 35, eff. April 2, 2012; 2013, No. 103 (Adj. Sess.), § 7, eff. April 14, 2014; 2015, No. 20, § 3, eff. May 7, 2015; 2019, No. 3, § 6, eff. April 18, 2019; 2021, No. 139 (Adj. Sess.), § 15, eff. May 27, 2022.)