Vermont captive insurance leaders ask Legislature to fund DFR systems, workforce and conference infrastructure

Vermont captive insurance industry leaders and state regulators told the House Committee on Commerce and Economic Development on Wednesday that the state must invest in regulatory systems, workforce development and meeting infrastructure to sustain a sector that accounts for hundreds of captives and steady premium tax revenue.

At a Jan. 22 briefing, Kevin Mead, chief executive officer of the Vermont Captive Insurance Association, said Vermont hosts “nearly 700” captives and that the industry brings substantial economic activity to the state. Mead asked the committee to ensure the Department of Financial Regulation (DFR) has upgraded digital systems and other supports so regulators can continue to provide world-class oversight.

Mead said, “the legislation that enables captive insurance in Vermont is 44 years old this year and the VCIA, the association is 40 years old this year,” and described the industry as “very important” to Vermont. He urged lawmakers to consider resourcing the DFR’s systems as one of the committee’s priorities and to engage with the industry at the VCIA’s annual conference in Burlington this summer.

Why it matters: Vermont is a leading domicile for captive insurance and annually collects premium taxes and local spending tied to captive operations and conferences. Industry and state officials told the committee that without continued regulatory quality, upgraded systems and a pipeline of local talent, captives and their supporting businesses could relocate or expand their operations outside Vermont.

Key details and requests

- DFR systems and staffing: Mead and Sandy Biglestone, acting commissioner and deputy commissioner of the DFRCaptive Insurance Division, said the division has experienced large growth and needs better technology to reduce administrative time and preserve staff capacity for examinations and regulatory oversight. Biglestone told the committee the division’s recent annual average of examinations is "107," and that the projection going forward is "125 examinations a year," underscoring the workload increase. Biglestone also said the DFR processes roughly "50 to about 100 filings for business plan changes a week."

- Workforce: Britney Nevins, the captive insurance economic development director at the Vermont Department of Economic Development, presented survey data and industry estimates showing the sectorand its service providersare adding positions but that many jobs are filled by nonresidents. Nevins summarized that the captive sector has generated roughly "$671,000,000 since captive enabling legislation in 1981" and reported the industrybased on partial survey returnsshows a decrease in Vermont-resident employees but growth in total employees conducting Vermont business. Nevins said many of the jobs pay about "$92,000 a year."

- Conference and meeting infrastructure: Mead said the VCIA brings roughly 1,000 people to Vermont for its annual conference and that hotel capacity and airline seats into Burlington are strained. He asked lawmakers to consider a feasibility study of Vermont’s meetings, incentives, conventions and expositions (MICE) market to determine whether more hotel rooms, convention space or related investments would increase business tourism and capture events currently going elsewhere.

Industry perspective and economic footprint

Melinda Young, vice president of risk management for Alberici Constructors and a VCIA board member, described why her company domiciled its main captive in Vermont and the local economic ties. Young said Albericiwhich she said has roughly $4,000,000,000 in annual revenuewrote about "$25,300,000 in premium" in 2023 and about "$23,700,000" the prior year through its Vermont captive. She also said Alberici pays roughly $600,000 in management fees to Vermont service providers and spends about $25,000 to $30,000 on an in-state retreat required by statute.

Regulatory balancing act

Biglestone emphasized that Vermontwhile striving to remain the leading domicilemust continue to uphold a high regulatory standard. "If we spent less administrative time using the systems that we have ... the time that we're spending administratively could be spent doing much better things," Biglestone told the committee, arguing for upgraded technology so staff can focus on outreach, education and examinations.

Next steps and committee notes

Committee members signaled interest in the asks. Mead said the VCIA will invite lawmakers to receptions and sessions at the associationconference in Burlington this July and that VCIA and the Department of Economic Development are assembling an ad hoc steering group to study MICE opportunities. Committee discussion indicated the DFR will bring a bill back to the committee in the coming session to address statutory or resourcing changes for the division.

Ending

The committee did not take any formal votes at the Jan. 22 briefing. Industry leaders and state officials left the committee with concrete requests: funding or authorization to upgrade DFR technology and workspace, legislative support for workforce and housing measures that affect recruitment and retention, and possible appropriations to study or invest in meeting and lodging infrastructure to capture larger conferences.