Vermont Secretary of State Jim Condos and Department of Financial Regulation Commissioner Michael Pieciak are working together to explore the possible uses of blockchain technology in the captive insurance industry’s recordkeeping practices. On January 10, 2019, the State issued a Request for Information from vendors that are interested in helping Vermont launch a pilot program to allow new captive insurance companies to use blockchain technology to register with the Secretary of State.
“Financial services firms are innovating at lightning speed and regulators have an obligation to keep up,” said Commissioner Pieciak in a statement released to the press on January 11. “This partnership with the Secretary of State provides a great opportunity for our teams to become better acquainted with distributed ledger technology and understand how the state and Vermont businesses might benefit.”
The program would provide a focused test of emerging technology use in state regulatory processes as well as review and revise statutes and regulations to ease blockchain implementation.
“Vermont has long been known as an international leader in the captive insurance industry with a robust regulatory and professional community and a willingness to embrace innovation,” said Captive Insurance Deputy Commissioner David Provost in the statement. “This makes Vermont’s captive insurance industry the ideal place to pilot this blockchain program.”
The State will also use the pilot program to identify other areas that could benefit from the data security and reduced expense that blockchain technology provides.
“Gravel & Shea has worked with the Vermont captive industry for several years and welcomes the State’s interest in using blockchain technology to satisfy reporting and filing requirements,” said Gravel & Shea’s blockchain technology group leader David Thelander. “Our firm works closely with the Distributed Ledger Governance Association (DLGA) to foster the same type of collaborative approach between industry and government, and we look forward to supporting the captive insurers’ involvement in the blockchain industry, both in and beyond Vermont.”
Questions related to the RFI are due on January 24, 2019 and the RFI is due on February 14, 2019.