Forming a Vermont Captive

Vermont's Department of Financial Regulation Will Guide You

General Steps in Forming a Vermont Captive

Note: Below are some general steps for formation. For information on fees, forms and instructions, please visit these two links:

http://www.dfr.vermont.gov/captives/general-licensing-forms-and-instructions

http://www.dfr.vermont.gov/captives/vermont-captive-division-fees-taxes

Generally the following steps will be followed in the process of incorporating a captive insurer in Vermont and applying for a license from The Vermont Department of Financial Regulation. For assistance, please call them at 802.828.3304.

1.  Conduct a feasibility analysis to determine if a captive insurance company is the right tool for the management of your company or group's risk.

2.  Choose a captive management firm that is authorized by the State of Vermont (A list can be found in VCIA's Captive Services Directory.)

3.  Arrange a meeting, including your captive manager, with the Deputy Commissioner and staff to discuss the proposed captive and obtain initial reactions from the department. In the case of association or risk retention group captives, the Commissioner will want to meet with key officers prior to licensing. Risk retention group captives should have a feasibility study for this meeting.

4.  Prepare documents necessary for incorporation. The services of a local lawyer may be desirable.

5.  Prepare documents necessary for application to the Department.

6.  Submit one copy of all materials in numbers (2) and (3) above to the Commissioner of DFR for review. Include the application fee and the actuarial review fee. Please contact the Department of Financial Regulation for fee details.phone: 802.828.3304  

7.  Submit one additional copy of the application material to the assigned review firm when instructed to do so by the Commissioner.

8.  Petition the Commissioner to issue a certificate of Public Good. The factors to be addressed are outlined in 8 V.S.A. S6006(d). In addition, a statement of the benefit to Vermont should be included.

9.  After the Commissioner has issued the certificate of Public Good, present this and the documents in number (2) above to the Secretary of State's office along with the appropriate fee in order to incorporate the captive (see 11V.S.A. S2201).

10.  After receiving Certificate of Authority, submit the annual license fee.

11.  Other requirements:

  • Have your CPA complete the necessary form for authorization to perform audits, if not currently approved.
  • Have your actuary complete the necessary form for authorization to render the opinion on reserves, if not currently approved.
  • The Department may perform an organizational exam shortly after issuing the Certificate of Authority.
Please contact Vermont's Department of Financial Regulation to find out more.  802.828.3304.