Two government agencies in the US state of Vermont have joined forces to explore the use of blockchain technology in the digital record-keeping practices of the captive insurance industry.
Last week, the Secretary of State’s Office (SoS) and Department of Financial Regulation (DFR) signed a memorandum of understanding (MOU) to launch a blockchain pilot in order to identify areas where the use of blockchain technology in regulatory and other government business may increase data security and reduce costs for residents and those doing business in Vermont.
“The parties agree that the potential adoption of blockchain for wider application is best explored through limited pilot program designed to test the functionality of the emerging technology with the parties’ operations,” the agencies said. “The parties shall work collaboratively to launch a pilot program offering new Vermont captive insurance companies the option of registering with SoS through blockchain for a term to be determined by the parties.”
A captive insurer is generally defined as an insurance company that is wholly owned and controlled by its insureds. Its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer’s underwriting profits.
According to the jointly issued request for information, the pilot program will include a review and revision of relevant statutes, rules, regulations, and bulletins to ease blockchain implementation.
Vermont Secretary of State Jim Condos said that the pilot will allow them to examine whether or not the application of blockchain technology for digital recordkeeping can improve aspects of the state regulatory process.
“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,” Captive Insurance Deputy Commissioner David Provost said in the statement. “This makes Vermont’s captive insurance industry the ideal place to pilot this blockchain program.”
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