House amends broad insurance regulation bill; third reading ordered

The House on Friday amended H.137, “an act relating to the regulation of insurance products and services,” and ordered the bill for third reading after committee presentations and member questions.

The bill would make a range of changes to the Department of Financial Regulation’s (DFR) authority and reporting rules, update captive insurance corporation governance language, add three exemptions for companies from Vermont’s money transmission licensing requirements, and change how proposed Medicare supplement (Medigap) rate increases are handled and posted.

Representative White (member from Bethel), speaking for the Committee on Commerce and Economic Development, said the bill combines housekeeping and substantive proposals from the DFR and described section-by-section changes. “An important component of effective financial regulation is that regulations are clear, consistent and up to date when addressing emerging trends and challenges,” White said. The committee’s strike-all amendment is available on the House Commerce and Economic Development calendar.

Key provisions summarized during the committee presentation include clarifying confidentiality provisions to cover all persons licensed or required to be licensed by the commissioner rather than only those regulated under specified chapters; updating cross references to reflect repeals and new chapters (for example, references to the LLC chapter); broadening which company representatives must submit required statements and reports so the law applies to LLC-formed captives and reciprocal insurers; and specifying that captive insurance companies may reinsure any insurance policy authorized in Vermont subject to the commissioner’s approval.

Section 15 would add three exemptions from money transmission licensing for certain payroll-related services and small payroll processors that meet specified limits and safeguards. The joint fiscal office fiscal note presented to the House Ways and Means Committee indicated that fees from money transmitter licenses contributed roughly $328,000 to the Financial Institution Supervision Special Fund in fiscal 2024 (about 9% of the fund’s $3.6 million revenue), and that fewer than five companies would be affected by the exemptions—producing a minimal fiscal impact on the special fund.

Other changes would: treat certain reports as publicly available where national standards require it; specify permitted charges to clarify that borrower-paid discount points at a borrower’s request are permitted charges; require DFR-conducted studies on transaction holds that banks may place where fraud is suspected, remedies for coerced debt, and genetic-privacy issues related to direct-to-consumer testing companies; and alter notice and public-hearing timing for some Medigap rate increases.

Members questioned the bill. The member from Northfield said the requested DFR studies—on suspected fraud holds, coerced debt and genetic-privacy issues—were appropriate to balance protection and access. The member from Coventry raised the potential for bankruptcies of genetic-testing firms to affect consumers’ genetic data and said that was among the reasons for the study. Representative Burkhart (member from South Burlington), speaking for Ways and Means, summarized the joint fiscal office note and the expected minimal fiscal impact on DFR’s special fund.

A technical wording issue in the committee amendment was raised by a member from Callus concerning a sentence about mutual insurers; the presenter acknowledged a likely surplus word and noted the item for correction.

The Committee on Commerce and Economic Development reported the bill favorably with amendment by an 11-vote margin. The House voted to amend the bill as recommended by the committee by voice vote, and on a subsequent voice vote the House ordered third reading. The precise roll-call counts were not recorded on the floor record presented.

If enacted, most of the act would take effect July 1, 2025; specified Medicare supplement provisions were described as effective Jan. 1, 2026, in the committee summary.

Actions at the desk on H.137 were committee-recommended technical and substantive amendments, acceptance of those amendments by voice vote, and ordering the bill for third reading.

The bill drew testimony in committee from DFR leadership, the Vermont Bankers Association, insurance industry representatives, healthcare advocates, captive insurance association representatives, and other stakeholders.