Vermont Statutes Title 8 Sec. 6034c
Terms Used In Vermont Statutes Title 8 Sec. 6034c
- Agency captive insurance company: means a captive insurance company that is owned or directly or indirectly controlled by one or more insurance agencies or brokerages licensed under the laws of any state and that only insures risks of policies that are placed by or through such agency or agencies, or brokerage or brokerages, as applicable. See
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association: means any legal association of individuals, corporations, limited liability companies, partnerships, associations, or other entities, the member organizations of which or which does itself, whether or not in conjunction with some or all of the member organizations:
- Association captive insurance company: means any company that insures risks of the member organizations of the association and that also may insure the risks of affiliated companies of the member organizations and the risks of the association itself. See
- Captive insurance company: means any pure captive insurance company, association captive insurance company, sponsored captive insurance company, industrial insured captive insurance company, agency captive insurance company, risk retention group, affiliated reinsurance company, or special purpose financial insurance company formed or licensed under the provisions of this chapter. See
- Commissioner: means the Commissioner of Financial Regulation. See
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- 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. See
- Industrial insured: means an insured:
- Industrial insured captive insurance company: means any company that insures risks of the industrial insureds that comprise the industrial insured group, and that may insure the risks of the affiliated companies of the industrial insureds and the risks of the controlled unaffiliated business of an industrial insured or its affiliated companies. See
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- 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. See
- 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. See
- Pure captive insurance company: means any company that insures risks of its parent and affiliated companies or controlled unaffiliated business. See
- Risk retention group: means a captive insurance company organized under the laws of this State pursuant to the Liability Risk Retention Act of 1986, 15 U. See
- 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. See
- Sponsored captive insurance company: means any captive insurance company:
§ 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 Vt. Stat. Ann. chapter 11 if the converted entity is to be a corporation;
(B) the provisions of 11 Vt. Stat. Ann. 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.)