This updates our May 2, 2011 blog post.

On May 11, 2011, Vermont Governor Peter Shumlin signed into law H.438 (the “Bill”) allowing for the incorporation of protected cells.  Multiple protected cells are combined to form a single sponsored captive insurance company.  By allowing for the incorporation of protected cells, the expectation is that there will be increased protections for the sponsored captive insurance company in the event of an insolvency of one or more protected cells, because the bankruptcy courts will be more likely to treat each protected cell as a separate legal entity as each cell will now be officially recorded as an existing legal entity with the Secretary of State.  Vermont hopes that these statutory changes will increase its attractiveness as the state of domicile for those seeking to establish captive insurance companies.  The Bill also amends Vermont’s laws with respect to other matters, including merchant banks, independent trust companies and the calculation of medical loss ratios.

Click here for a full copy of the Bill.