The Legacy Insurance Management Act, which was signed into law by Vermont Gov. Peter Shumlin, creates specialized Vermont insurance companies that may acquire closed blocks of non-admitted commercial insurance policies and reinsurance agreements from other companies, and subjects such transactions to fees and transfer taxes. Prior to transferring the policies to the assuming insurance company, the assuming company must submit a legacy insurance transfer plan outlining the details of the transfer, including, but not limited to, a listing of all parties and policies involved and details concerning the solvency of the assuming company both prior to and after the transfer. The assuming company must pay a $30,000 fee at the time the plan is submitted as well as a fee to cover the reasonable cost to retain an actuary to review the plan. After a plan is approved, the assuming company must also pay a transfer tax equal to:
— 1% of the first $100 million of the gross liabilities transferred; and
— 1/2 of 1% of the gross liabilities transferred that exceed $100 million.
Assuming companies must be domiciled within Vermont and must hold at least one annual meeting in the state. The company will also be subject to an annual $300 fee.
H.B. 198, Laws 2014, effective February 19, 2014