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U.S. House Subcommittee Chair, Judy Biggert, Affirms Dodd-Frank is Not Applicable to Captive Insurance Industry

Coalition for Captive Insurance Clarity Gains Momentum


Montpelier, VT – January 7, 2013 – The outgoing Chairman of the Subcommittee on Insurance of the Committee on Financial Services in the House of Representatives has reaffirmed that the Nonadmitted and Reinsurance Reform Act (NRRA), which is part of the Dodd-Frank Act was never intended to apply to captive insurance.  In a letter to the new Chairman and Ranking Member of the Committee, former Chairman of the Subcommittee on Insurance, Representative Judy Biggert wrote, “As a supporter of NRRA and an advocate for its inclusion and passage as part of Dodd-Frank, I can tell you unequivocally that the NRRA was never intended to include the captive insurance industry.”

Biggert went on to state, “This provision (NRRA) was intended to create certainty in the tax treatment and regulation of the surplus lines and in the reinsurance industry. Despite this very specific purpose, a couple of states are misinterpreting the application of NRRA’s definition of ‘Non-Admitted’.”

A coalition of the captive insurance industry, the Coalition for Captive Insurance Clarity (CCIC) has been formed under the leadership of the Vermont Captive Insurance Association (VCIA) to push for clarity that may include legislative language that would reaffirm that the NRRA was never intended to apply to captive insurance. This letter from Representative Biggert is a clear indication of Congress’ intent not to include the captive insurance industry in NRRA.

NRRA, a subsection of the Dodd-Frank legislation, has caused some confusion over whether it is applicable to captive insurance due to some misinterpretation of the current language.  Richard Smith, president of the Vermont Captive Insurance Association (VCIA), expressed his thanks for the support of Representative Biggert.  “This endorsement from the outgoing subcommittee Chairman, who played a substantive and important role in crafting the NRRA, makes it crystal clear – captive insurance is not and never was intended to be included in Dodd-Frank.”

The CCIC was formed by industry members to coordinate efforts to amend the law and provide clear and definitive language regarding the captive insurance industry and the NRRA. “A few domiciliary states and opportunistic service providers are clearly exploiting the present situation which is not in the best interest of their clients or the industry as a whole,” added Dan Towle, Vermont’s Director of Financial Services. 

Representative Biggert suggested that a technical amendment may be necessary for solving this confusion, “In order to address the problem created, a technical amendment might be needed to reinforce the Congressional intent of this legislation.” A complete copy of the letter can be found at:

Captive insurance is a regulated form of self-insurance that has existed since the 1960’s, and has been a part of the Vermont insurance industry since 1981 when Vermont passed the Special Insurer Act. Captive insurance companies are formed by companies or groups of companies as a form of alternative insurance to better manage their own risk. Captives are typically used for corporate lines of insurance such as property, general liability, products liability, or professional liability. Growth sectors of the captive insurance industry include professional medical malpractice coverage for doctors and hospitals, and the continued trend of small and mid-sized companies forming captive insurance companies. 

VCIA is the largest trade association in the world for captive insurance. Established in 1985, the association has grown to provide programs that support the captive insurance industry on both the state and federal levels for its 450-plus member companies.

For more information on the Coalition for Captive Insurance Clarity or to join contact Richard Smith at the Vermont Captive Insurance Association at 802-658-8242 or email

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