Expanding Vermont's worldwide reputation as an insurance pioneer, Gov. Peter Shumlin today signed the Vermont Legacy Insurance Management Act (LIMA). This law creates specialized Vermont insurance companies that would acquire commercial policies from other companies wishing to get old policies off their books enabling them to use capital reserves for new initiatives.
LIMA will allow companies no longer active in writing a particular type of insurance policy to transfer those policies to a company that specializes in or continues to service those lines.
Shumlin said these new companies will also contribute to Vermont's economy.
"Patterned after Vermont's captive insurance companies, I believe LIMA will bring new revenues to the state through transaction tax revenues and fees, and will create a wide variety of high-value, skilled, well-paying financial sector job opportunities," he said.
The law also requires LIMA companies to hold an annual meeting here in Vermont, which will sell hotel rooms, meals and add tourist dollars.
Susan Donegan, Commissioner of the Department of Financial Regulation, said she is pleased that Vermont has again forged the way for new opportunities in the insurance industry.
"The first of its kind in the United States, this landmark legislation allows Vermont to respond to a unique insurance market objective and is a golden opportunity for the state to expand its innovative financial services regulatory niche," she said.
All transfers will be subject to the review and approval of the Vermont Department of Financial Regulation and will be limited to commercial insurance policies. No personal insurance, such as life, health, auto, homeowners, or workers' compensation, is involved.
Creating a new insurance option is not new to Vermont. This state leads the nation with more than 1,000 captive insurance entities located in Vermont.