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ACT NO. 84

(H.607)

Investments of Insurance Companies

This act updates and modernizes Vermont’s investment laws for insurance companies and clarifies Vermont law on annuity writing captive insurance companies. The legislation provides for investment in mutual funds. Companies will still be required to pursue prudent investment strategies. At the same time, the act does not change the Department of Banking, Insurance, Securities, and Health Care Administration’s monitoring of the financial condition of domestic insurers. It is largely based on a model law developed by the National Association of Insurance Commissioners. The amendments relating to captive insurance companies will clarify the authority for annuity writing by captives and equalize captive insurers with other annuity writers with respect to premium taxes. The act also requires the Department of Banking, Insurance, Securities, and Health Care Administration to report at least once every five years on new developments in investments.

Effective Date: This act took effect on April 19, 2000 and applies to insurers’ securities acquired after that date, except for the section on the filing exemption for securities which took effect January 1, 2000.