(Montpelier, VT – Insurance News 360) – Vermont Department of Financial Regulation Commissioner Michael Pieciak and Secretary of State Jim Condos on Jan. 9 signed a memorandum of understanding regarding a collaboration to explore blockchain technology and its use in digital record keeping practices of the captive insurance industry.
The next day the two offices issued a request for information to identify vendors who may work with Vermont to create a pilot program allowing new captive insurance companies to register with the Secretary of State’s office using blockchain technology.
The program is meant to test the functionality of blockchain in the state’s regulatory processes. It will include a review and revision of relevant statutes, rules, regulations and bulletins to ease implementation.
“Developments in technology provide opportunities for government to improve efficiency and transparency, cut red tape, and improve services for Vermonters,” said Secretary Condos. “This pilot will allow us to examine whether or not the application of blockchain technology for digital recordkeeping can improve aspects of the state regulatory process.”
Blockchain or similar digital ledger technology is designed to create a transparent and validated record of transactions, while providing increased efficiency, accuracy, and security for users when compared to traditional recordkeeping methods.
“Financial services firms are innovating at lightning speed and regulators have an obligation to keep up,” said Commissioner Pieciak. “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.”
Vermont is the world-wide leader in captive insurance by premium written and third in the world by active licenses.
The pilot program will help the state 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 adoption of this emerging technology may yield significant benefits such as more efficient administration of their respective duties while maximizing taxpayer value for Vermont’s citizens.
Questions related to the RFI are due on January 24, 2019 and the RFI is due on February 14, 2019.
Source: Vermont Department of Financial Regulation.