The Vermont Department of Financial Regulation Offers Guidance for Risk Retention Groups Subject to Information Requests from Non-Domiciliary Regulators.
On May 19, 2020, the Vermont Department of Financial Regulation (the “DFR”) issued a memorandum and guidance for Vermont-domiciled risk retention groups subject to information requests from non-domiciliary regulators related to the COVID-19 pandemic.
This action follows a flurry of information requests from state insurance departments across the country for information on the COVID-19 pandemic’s impact on insurance carriers, and the actions that carriers are taking in response. In many cases, the scope of information requested is extensive and, while there is significant overlap, the requests are not identical, meaning that a risk retention group registered in multiple states could be faced with the prospect of having to prepare multiple, time-consuming submissions.
Rather than respond individually to the information requests of each state regulator, the DFR recommends that risk retention groups complete the NAIC COVID-19 Information Request Template (the “NAIC Template”), a copy of which is available here. Additionally, because the NAIC Template is primarily intended for commercial insurance carriers, the DFR has provided question by question guidance on how the NAIC Template should be tailored to risk retention groups. This guidance should narrow the scope of many of the questions to focus on the information needed by the DFR to analyze each Vermont-domiciled risk retention group individually, as well as the collective impact of the COVID-19 pandemic on the risk retention group industry in Vermont.
The NAIC Template, as modified by the DFR guidance, would then be submitted to the DFR, and could also be submitted to any other state insurance departments that have requested COVID-19 pandemic-related information in lieu of such insurance department’s forms.
The DFR has also confirmed that information included in the NAIC Template will be treated as confidential and that, to the extent that it is shared with other state insurance regulators, it will be subject to the NAIC’s Master Information Sharing and Confidentiality Agreement.
The NAIC Template is due on June 30, 2020, though the DFR has indicated that it will be willing to consider extensions if necessary.
A copy of the DFR’s guidance is available here, and DRM is available to assist with the NAIC Template or any other issues related to these submissions.
Additionally, at least 15 states and the federal government have proposed (or enacted) legislation related to business interruption coverage or limitations on an insurers’ ability to exercise rights under an insurance policy (e.g., required forbearance, restrictions on cancellation, required premium rebates, etc.). While such actions are too voluminous to cover here, DRM is available to assist in assessing the impact, if any, of such laws or regulations on risk retention groups.
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To explore how DRM’s Captive Insurance group can help with your captive insurance matters, contact directors Kathleen Davis or Zaw Win.