MONTPELIER, Vt. (AP) -- Vermont is hoping to replicate its success in promoting the captive insurance industry by inviting a new type of insurance company to locate and grow in the state.
Gov. Peter Shumlin on Wednesday signed a bill called the Vermont Legacy Insurance Management Act. It allows specialized insurance companies that take certain commercial policies off the hands of other insurance companies that don't want them to operate in the state.
Shumlin predicted the new law 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."
Captive insurance companies are wholly owned subsidies of large corporations that want to insure themselves against property loss, casualty and liability.
Financial Regulation Commissioner Susan Donegan said Vermont was the first state in the country to pass legislation designed to attract legacy insurance companies. She said the new law "allows Vermont to respond to a unique insurance market objective" and called it a "golden opportunity for the state to expand its innovative financial services regulatory niche."
All policy transfers would be reviewed by state regulators, Donegan said.
She added that the law covers only commercial insurance. No personal insurance, such as life, health, auto, homeowners' or workers' compensation, is included.