2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6034c. Protected cell conversion

§ 6034c. Protected cell conversion
(a)(1) Subject to the prior written approval of the Commissioner, on application of the sponsor and with the prior consent of each participant of the affected protected cells or as otherwise permitted pursuant to a participation agreement and the consent of each affected incorporated protected cell, a sponsored captive insurance company or a sponsored captive insurance company licensed as a special purpose financial insurance company may convert one or more protected cells or incorporated protected cells into a:
(A) single protected cell or incorporated protected cell;
(B) new sponsored captive insurance company;
(C) new sponsored captive insurance company licensed as a special purpose financial insurance company;
(D) new special purpose financial insurance company;
(E) new pure captive insurance company;
(F) new risk retention group;
(G) new agency captive insurance company;
(H) new industrial insured captive insurance company; or
(I) new association captive insurance company.
(2) Any such conversion shall be subject to section 6031 and subchapters 1 and 4 of this chapter, as applicable, as well as to a plan or plans of operation approved by the Commissioner, without affecting any protected cell’s or incorporated protected cell’s assets, rights, benefits, obligations, and liabilities.
(b) Any such conversion shall be deemed for all purposes to be a continuation of each such protected cell’s or incorporated protected cell’s existence together with all of its assets, rights, benefits, obligations, and liabilities, as a new protected cell or incorporated protected cell, a licensed sponsored captive insurance company, a sponsored captive insurance company licensed as a special purpose financial insurance company, a pure captive insurance company, a risk retention group, an industrial insured captive insurance company, or an association captive insurance company, as applicable. Any such conversion shall be deemed to occur without any transfer or assignment of any such assets, rights, benefits, obligations, or liabilities and without the creation of any reversionary interest in, or impairment of, any such assets, rights, benefits, obligations, and liabilities.
(c) Any such conversion shall not be construed to limit any rights or protections applicable to any converted protected cell or incorporated protected cell and such sponsored captive insurance company or sponsored captive insurance company licensed as a special purpose financial insurance company under this subchapter or under subchapter 4 of this chapter, as applicable, that existed immediately prior to the date of any such conversion.
(d)(1) Any protected cell converting into an incorporated protected cell pursuant to this section, or converting into a new captive insurance company or risk retention group pursuant to this section, shall perform such conversion in accordance with:
(A) the provisions of 11A V.S.A. chapter 11 if the converted entity is to be a corporation;
(B) the provisions of 11 V.S.A. chapter 25, subchapter 10 if the converted entity is to be a limited liability company; or
(C) the provisions applicable to any other type of entity permissible under Vermont law if the converted entity is to be such an entity.
(2) As used in this subdivision, a protected cell that is not an incorporated protected cell shall be considered an “organization” as that term is defined in 11A V.S.A. § 11.01 and 11 V.S.A. § 4141; an “other insurer” as that term is defined in 8 V.S.A. § 6020; and an “entity” as that term is defined in 11C V.S.A. § 102. (Added 2015, No. 74 (Adj. Sess.), § 3, eff. April 13, 2016; amended 2019, No. 110 (Adj. Sess.), § 5, eff. June 15, 2020; 2021, No. 25, § 24, eff. May 12, 2021.)