Department of Financial Regulation officials told lawmakers on Jan. 9 that preventing insurer insolvency is their foremost consumer protection responsibility and that protecting a domestic carrier requires a combination of adequate rates, cost‑control actions and stronger governance.

Commissioner Mary Sampson opened DFR’s testimony by saying the agency’s top duty is ensuring domestic insurer solvency. "They have to have adequate rates," she said, adding that adequacy and cost controls must work in parallel to rebuild and maintain the surplus buffer regulators require.

Sampson said DFR found the separation of rate review (Green Mountain Care Board) from solvency oversight complicated earlier efforts to align insurer rates with solvency needs, but she praised recent 2025 coordination: a more assertive set of hospital budget orders coupled with DFR contracting work has improved the prospects that rate decisions will translate into reserve contributions and cost reductions.

On governance, DFR proposed changes to Blue Cross’s board composition to increase public‑policy representation and suggested creating clearer mechanisms for the solvency regulator to intervene when early warning signs appear. Sampson told the committee DFR currently issues solvency opinions and maintains frequent touchpoints with Blue Cross, but said regulators should have stronger “relief valves” in extreme scenarios.

The agency also discussed options to blunt risk in the small‑group and individual markets. Reinsurance programs using CMS waiver funding are one path; Sampson cautioned such programs shift cost and have administrative expense, while other options — including targeted reinsurance, value‑based contracts and provider risk‑sharing — could spread catastrophic claims and align incentives without simply layering on reinsurance premiums.

DFR recommended continued monitoring (weekly touchpoints, monthly financial updates, and quarterly statutory filings) and promised to work with the committee on potential statutory or governance changes. Lawmakers asked for concrete proposals and for early readouts on utilization and prior‑authorization data (Act 111), which DFR and the insurer agreed to supply for follow‑up review.

The hearing concluded with no vote; DFR and Blue Cross will return information requested by the committee.