By Nick Pearson and Geoffrey Rosenblat

Vermont Governor Peter Shumlin has signed H. 198, titled the Legacy Insurance Management Act (“LIMA”), in an effort to attract new domestic insurance companies dedicated to run-off business in Vermont.  LIMA allows for the formation of Vermont-domiciled insurance companies whose sole purpose is to acquire closed blocks of P&C commercial insurance and reinsurance business from non-admitted companies.  To qualify as a “closed block” the transferring insurer must have ceased to write the business, the policies must have fully expired for a period of at least 60  months, and the must be no active premiums to be paid.  The assuming insurer will need to file an application with the Vermont Insurance Commissioner that includes a legacy insurance transfer plan.  The plan will need to provide, among other things, details of the underlying policies, a “no objection” letter from the transferring insurer’s domiciliary regulator, the transferring insurer’s financial statements, actuarial support and financial projections.  In addition the acquiring company must submit to the limited jurisdiction of insurance regulators in those states where policyholders reside for purposes of application of those states’ Unfair Claims Settlement Practices Acts.  READ MORE at InsureReinsure.com