The US state of Vermont has signed a new act that will make it beneficial for commercial insurers to register their operations that are in run-off with the state.
Vermont’s Legacy Insurance Management Act (LIMA) is the first of its kind to be made law in the US although the legislation is based on similar structures in Europe.
Vermont, which is already an active centre for captives, has taken the lead in passing such legislation which it hopes will attract legacy business and bring new revenues to the state through transaction tax revenues and fees.
Financial regulation commissioner Susan Donegan described the new law as a "golden opportunity for the state to expand its innovative financial services regulatory niche” and said that it "allows Vermont to respond to a unique insurance market objective”.
Gov. Peter Shumlin signed in the bill on January 29 2014, after it was passed in the house last year. The law is only applicable to commercial insurers.