Vermont continues to be a very proactive insurance regulator in coming up with potential solutions for the industry. That is certainly the case in the captives space, where Vermont has worked over the years to make its captive laws and regulations open and welcoming. This new development to offer onshore alternatives to offshore jurisdictions affected by BEAT in the reinsurance space seems innovative--we will be studying and considering this further to see what opportunities it might offer the industry.
The new law offers an onshore affiliated reinsurance alternative to insurance companies affected by the recent imposition of the Base Erosion Anti-Abuse Tax (BEAT) on reinsurance ceded to offshore affiliates. Vermont’s new law provides a solution by creating a more favorable reinsurance alternative for US companies conducting business in offshore jurisdictions that are now faced with a substantial new tax burden.