ST. CROIX – Members of the Committee on Finance, led by Senator Kurt A. Vialet, convened in a meeting at the Frits E. Lawaetz Legislative Conference Room. All items on the agenda were approved and will be sent to the full body for further consideration.
Testimony was heard regarding the following bills:
Bill No. 34-0191 – An Act amending title 22 Virgin Islands Code, chapter 55 relating to captive insurance companies to clarify the purpose of the chapter, and to prohibit the organization, within the Virgin Islands, of a special category of multistate insurers that may not be required to comply with the accreditation standards established by the National Association of Insurance Commissioners and adopted by the Territory as a NAIC-accredited jurisdiction.Ã¢â‚¬Â The measure was proposed by Senator Donna Frett-Gregory. The measure sought to update language in the section of Virgin Islands Code. Glendina Matthew, the Interim Director of the Division of Banking, Insurance and Financial Regulation, within the Office of the Lieutenant Governor spoke in support of the bill.
The bill, as currently drafted seeks to change the name of Title 22, Chapter 55 of the Virgin Islands code, currently known as the Ã¢â‚¬Å“Virgin Islands International Insurers ActÃ¢â‚¬Â to Ã¢â‚¬Å“Virgin Islands Captive Insurers ActÃ¢â‚¬Â, strike any reference to the term Ã¢â‚¬Å“international insurer(s) and insert in its place Ã¢â‚¬Å“captive insurersÃ¢â‚¬Â wherever it appears in Chapter 55 of title 22 of Virgin Islands Code. It also would clearly define what is a captive insurer, which is Ã¢â‚¬Å“an insurance company created and wholly owned by one or more non-insurance companies to insure the risks of its owner or parent corporation, essentially a form of self-insurance whereby the insurer is owned wholly by the insured and typically established to meet the risk management needs of its owners or members and whose primary jurisdiction is known as its domicile.
It also seeks to clearly establish the purpose of the chapter which is to allow the statutory organization of a captive insurance company, which may be classified as any single parent Captive Insurance Company, Association Captive Insurance Company, or Industrial Insured Captive Insurance Company, or any Branch Exempt Captive Insurer licensed under the provisions of the chapter to underwrite risks situated exclusively outside of the Virgin Islands. It would also prohibit the licensure of international insurers under the captive program and would prohibit a captive insurer from converting or being licensed in this Jurisdiction as a traditional multi-state insurer. Lawmakers voted in the affirmative for the measure.
In addition, lawmakers also received testimony for Bill No. 34-0204, An Act amending the Virgin Islands Code title 22, chapter 58, relating to self-insurance and title 29, chapter 10, section 543, relating to the powers of the Port Authority, to authorize the Virgin Islands Port Authority to establish a self-insurance program to cover and manage certain risks. Speaking on behalf of the bill was Vincent F. Frazer, Senior Staff Attorney for the Virgin Islands Port Authority, testifying on behalf of Carlton Dowe, its Executive Director. The bill is intended to be a cost saving measure for the Port Authority and managing its risks. The authority would benefit with savings in insurance premiums, as well as having a fund which claims can directly be paid from. According to FrazerÃ¢â‚¬â„¢s testimony, insurance premiums increased by more than 31 percent due to natural inflation, insurance market conditions, as well as the COVID-19 pandemic. Frazer stated that over the last 5 years, VIPA paid almost $1.3 Million for liability and physical damage of their automobile fleet, while simultaneously losing $550,000 in the same period.
Suzette Richards, Legal Council for the Division of Banking, Insurance and Financial Regulation, testified on behalf on Attorney Glendina Matthew, the Interim Director of the Division of Banking, Insurance, and Financial Regulation, within the Office of the Lieutenant Governor. The Division did not object to the Port Authority establishing a self-insurance program. However, it was highlighted that they believed that the Office of the Lieutenant Governor should not have jurisdiction over it, highlighting several issues, stating that self-insurance funds are generally not regulated.
It was also mentioned that the Commissioner of Insurance generally does not license, regulate, or supervise government entities, stating that they would subject to the statutory provisions that apply to the government entity. Furthermore, the Commissioner of Insurance generally does not co-regulate the business of insurance with regulated entities, stating that it would have been subject to regulations by both the Port Authority, and the Commissioner of Insurance. Another concern brought up by Attorney Richards was that the bill did not have an enforcement mechanism in that form. The concerns were considered by the senators, and an amended bill was offered and will be voted upon at the appropriate time. The proposed bill was voted upon favorably.
Senators attending todayÃ¢â‚¬â„¢s meeting included Kurt A. Vialet, Donna A. Frett-Gregory, Marvin A. Blyden, Samuel CarriÃƒÂ³n, Dwayne M. DeGraff, Javan E. James, and Janelle K. Sarauw, Novelle E. Francis Jr. and Carla J. Joseph.