8 V.S.A. § 3770 — VT Code / Title 8 / Chapter 103 / Section 3770
§ 3770. Proration of values; net value of paid-up additions
Status: in_force

Any cash surrender value and any paid-up nonforfeiture benefit available under a policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in sections 3763-3768 of this subchapter may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall not be less than the amounts used to provide such additions. Notwithstanding the provisions of section 3763 of this subchapter, additional benefits shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required under this subchapter, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits. As used in this section, “additional benefits” means benefits payable:

(1) in the event of death or dismemberment by accident or accidental means;

(2) in the event of total and permanent disability;

(3) as reversionary annuity or deferred reversionary annuity benefits;

(4) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this subchapter would not apply;

(5) as term insurance in the life on a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child turns 26 years of age, is uniform in amount after the child's age is one year of age, and has not become paid-up by reason of the death of a parent of the child; or

(6) as other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits.
8 V.S.A. § 4992 — VT Code / Title 8 / Chapter 137 / Section 4992
§ 4992. Termination
Status: in_force

The authority granted to the Commissioner to establish a joint underwriting association under this chapter shall continue indefinitely unless the authority is terminated by act of the General Assembly. In the event authority is so terminated, any association established prior to the termination date may continue to exist for a period of one year from the date it commences underwriting activities. All obligations incurred by the association or by policyholders during this period shall be honored and binding until discharged, and any association shall remain in effect for the purpose of discharging any obligations incurred. The plan of operation shall provide for the orderly dissolution of the association at its termination. Upon termination of the association and the discharge of all its liabilities and at any such other time as may be specified in the plan, any excess funds of the association shall be distributed to the policyholders of the association in an equitable manner as set forth in the plan of operation.
8 V.S.A. § 4822 — VT Code / Title 8 / Chapter 131 / Section 4822
§ 4822. Sanctions
Status: in_force

If the Commissioner determines, after notice and hearing, that any person has violated any provision of this subchapter, the Commissioner may:

(1) for each separate violation, impose a penalty up to $25,000.00;

(2) revoke or suspend the person's license;

(3) order the managing general agent, reinsurance intermediary, or controlling producer to reimburse the insurer or reinsurer, or the rehabilitator or liquidator of the insurer or reinsurer for any losses incurred that are caused by a violation of this subchapter; and

(4) order the controlling producer to cease placing business with the controlled insurer.
8 V.S.A. § 2577 — VT Code / Title 8 / Chapter 79 / Section 2577
§ 2577. Virtual-currency kiosk operators
Status: in_force

(a) Daily transaction limit.

(1) A virtual-currency kiosk operator shall not accept or dispense more than $2,000.00 of cash in a day in connection with virtual-currency transactions with a single, new customer in this State via one or more virtual-currency kiosks.

(2) A virtual-currency kiosk operator shall not accept or dispense more than $5,000.00 of cash in a day in connection with virtual-currency transactions with a single, existing customer in this State via one or more virtual-currency kiosks.

(b) Fee cap. The aggregate fees and charges, directly or indirectly, charged to a customer related to a single transaction or series of related transactions involving virtual currency effected through a money transmission kiosk in this State, including any difference between the price charged to a customer to buy, sell, exchange, swap, or convert virtual currency and the prevailing market value of such virtual currency at the time of such transaction, shall not exceed the greater of the following:

(1) $5.00; or

(2) 15 percent of the U.S. dollar equivalent of virtual currency involved in the transaction or transactions.

(c) Single transaction. The purchase, sale, exchange, swap, or conversion of virtual currency, or the subsequent transfer of virtual currency, in a series of transactions shall be deemed to be a single transaction for purposes of subsections (a) and (b) of this section.

(d) Licensing requirement. A virtual-currency kiosk operator shall comply with the licensing requirements of this subchapter to the extent that the virtual-currency kiosk operator engages in virtual-currency business activity.

(e) Operator accountability. If a virtual-currency kiosk operator allows or facilitates another person to engage in virtual-currency business activity via a virtual-currency kiosk in this State that is owned, operated, or managed by the virtual-currency kiosk operator, the virtual-currency kiosk operator shall do all of the following:

(1) ensure that the person engaging in virtual-currency business activity is licensed under subchapter 2 of this chapter to engage in virtual-currency business activity and complies with all other applicable provisions of this chapter;

(2) ensure that any charges collected from a customer via the virtual-currency kiosk comply with the fee cap established in subsection (b) of this section; and

(3) comply with all other applicable provisions of this chapter.

(f) Moratorium. To protect the public safety and welfare and safeguard the rights of consumers, virtual-currency kiosks shall not be permitted to operate in Vermont prior to July 1, 2026. This moratorium shall not apply to a virtual-currency kiosk that was duly licensed and operational in Vermont on or before June 30, 2024.

(g) Customer identification. For each virtual-currency transaction occurring at a virtual-currency kiosk in this State, the virtual-currency kiosk operator shall verify the identity of the customer prior to accepting payment from the customer. A virtual-currency kiosk operator shall not allow a customer to engage in any transaction at a virtual-currency kiosk under any name, account, or identity other than the customer's own true name and identity. A virtual-currency kiosk operator shall obtain a copy of a government-issued identification card that identifies the customer and shall collect additional customer information, including the customer's name, date of birth, telephone number, address, and email address prior to accepting any payment from a customer at a virtual-currency kiosk in this State. In addition, a virtual-currency kiosk operator shall take a photograph of the customer in a retainable format at the virtual-currency kiosk for each transaction. A virtual-currency kiosk operator shall be strictly liable for any violation of this subsection.

(h) Customer support. A virtual-currency kiosk operator shall offer live, toll-free, telephone customer support during the hours of operation of a virtual-currency kiosk. The customer support telephone number shall be displayed on the virtual-currency kiosk or on the virtual-currency kiosk screen.

(i) Mandatory live screening.

(1) A virtual-currency kiosk operator shall identify and speak by telephone with:

(A) a new customer over 60 years of age prior to such customer's first virtual-currency transaction with the virtual-currency kiosk operator; or

(B) a customer attempting to conduct more than $5,000.00 in virtual-currency transactions during any consecutive 10-day period.

(2) The virtual-currency kiosk operator's approval of a transaction subject to a mandatory live screening under this subsection shall be dependent upon its assessment of its communication with the customer during the screening.

(3) A virtual-currency kiosk operator shall record and retain a copy of each mandatory live screening.

(4) During the mandatory live screening, the virtual-currency kiosk operator shall:

(A) positively identify the customer;

(B) reconfirm any attestations made by the customer at the virtual-currency kiosk;

(C) discuss the purpose of the transaction; and

(D) discuss types of fraudulent schemes relating to virtual currency.

(j) Blockchain analytics. A virtual-currency kiosk operator shall use blockchain analytics software and retain an established third party that specializes in performing blockchain analytics to assist in the prevention of sending purchased virtual currency from a virtual-currency kiosk operator to a digital wallet known to be affiliated with fraudulent activity at the time of a transaction. The Commissioner may request evidence from any virtual-currency kiosk operator of its current use of blockchain analytics.

(k) Full refund for new customers. The virtual-currency kiosk operator shall provide a full refund to a customer who was fraudulently induced to engage in a virtual-currency kiosk transaction, provided the fraudulently induced transaction occurred while the customer was a new customer and further provided the customer contacts the virtual-currency kiosk operator and a law enforcement or government agency to inform the operator and the agency of the fraudulent nature of the transaction within 90 days after the customer's last virtual-currency transaction with the virtual-currency kiosk operator. The refund shall include any fees charged in association with the fraudulently induced transaction.

(l) Fee refund for existing customers. The virtual-currency kiosk operator shall provide a fee refund to an existing customer who has been fraudulently induced to engage in a virtual-currency kiosk transaction, provided the customer contacts the virtual-currency kiosk operator and a law enforcement or government agency to inform the operator and the agency of the fraudulent nature of the transaction within 90 days after the last fraudulently induced transaction. The refund shall include all fees charged in association with the fraudulently induced transaction.

(m) Fraud prevention. A virtual-currency kiosk operator shall take reasonable steps to detect and prevent fraud, including establishing and maintaining a written antifraud policy. The antifraud policy shall, at a minimum, include the following:

(1) the identification and assessment of fraud-related risk areas;

(2) procedures and controls to protect against identified risks;

(3) allocation of responsibility for monitoring risks;

(4) procedures for the periodic evaluation and revision of the antifraud procedures, controls, and monitoring mechanisms;

(5) procedures and controls that prevent more than one customer from using the same digital wallet;

(6) procedures and controls that enable the virtual-currency kiosk operator to prevent a digital wallet from being used at a virtual-currency kiosk it operates if the operator knows or reasonably should know the digital wallet is affiliated with fraudulent activities; and

(7) policies and procedures for using a risk-based method for monitoring customers on a post transaction basis.

(n) Due diligence policy. A virtual-currency kiosk operator shall maintain, implement, and enforce a written Enhanced Due Diligence Policy. The Policy shall be reviewed and approved by the virtual-currency kiosk operator's board of directors or an equivalent governing body of the virtual-currency kiosk operator. The Policy shall identify, at a minimum, individuals who are at risk of fraud based on age or mental capacity.

(o) Compliance policies. A virtual-currency kiosk operator shall maintain, implement, and enforce written compliance policies and procedures. Such policies and procedures shall be reviewed and approved by the virtual-currency kiosk operator's board of directors or an equivalent governing body of the virtual-currency kiosk operator.

(p) Compliance officer.

(1) A virtual-currency kiosk operator shall designate and employ a compliance officer who meets the following requirements:

(A) is qualified to coordinate and monitor compliance with this section and all other applicable federal and State laws and regulations;

(B) is employed full-time by the virtual-currency kiosk operator; and

(C) is not an individual who owns more than 20 percent of the virtual-currency kiosk operator by whom the individual is employed.

(2) Compliance responsibilities required under federal and State law and regulation shall be completed by one or more full-time employees of the virtual-currency kiosk operator.

(q) Consumer protection officer. A virtual-currency kiosk operator shall designate and employ a consumer protection officer who meets the following requirements:

(1) is qualified to coordinate and monitor compliance with this section and all other applicable federal and State laws and regulations;

(2) is employed full-time by the virtual-currency kiosk operator; and

(3) is not an individual who owns more than 20 percent of the virtual-currency kiosk operator by whom the individual is employed.

(r) The Commissioner may adopt rules the Commissioner deems necessary and proper to carry out the purposes of this section, including with respect to what constitutes fraudulent activity or a fraudulently induced transaction in the context of customer transactions at a virtual-currency kiosk.
8 V.S.A. § 3642 — VT Code / Title 8 / Chapter 101 / Section 3642
§ 3642. Liability for payments to nonresidents
Status: in_force

An action shall not be maintained against any such insurance company upon any right of action arising out of an insurance policy, annuity contract, or contract supplemental to any insurance policy or annuity contract, issued by such company, vested in a person residing in another state or country, or in the estate of such nonresident person, if prior to actual notice of the appointment in this State of an administrator, executor, or guardian of the estate or person of such nonresident, such right of action has been discharged or released by the executor, administrator, or guardian of such nonresident person or estate appointed in the state of his or her residence, or by a transferee of such policy, annuity contract, contract supplemental to any policy of insurance, or annuity contract or right of action thereon.
8 V.S.A. § 31310 — VT Code / Title 8 / Chapter 221 / Section 31310
§ 31310. Prohibited management interlocks
Status: in_force

(a) Except with the Commissioner's prior written approval, a director, officer, or employee of any other credit union or financial institution shall not at the same time be a director, officer, or employee of a credit union with a place of business or doing business in the State of Vermont.

(b) The terms of this section shall not apply to:

(1) a credit union that is in liquidation, receivership, conservatorship, or similar proceedings;

(2) a corporate credit union;

(3) a credit union service organization affiliated by reason of common ownership or control of at least 25 percent of the voting interest of such affiliated credit union service organization; or

(4) any other relationship otherwise permitted under guidelines or regulations of federal supervisory authorities or the Commissioner adopted from time to time, relating to management interlocks.
8 V.S.A. § 11603 — VT Code / Title 8 / Chapter 201 / Section 11603
§ 11603. Criminal penalties
Status: in_force

(a) It shall be a criminal offense, punishable by a fine of not more than $1,000.00 or imprisonment of not more than one year, or both, for any person to violate any existing order of the Commissioner or, after receipt of a removal order, or an order assessing a penalty, to perform any duty or exercise any power of or on behalf of any financial institution until the penalty has been satisfied, or otherwise satisfactorily resolved between the parties, or the removal or penalty order is vacated by the Commissioner or by a court of competent jurisdiction.

(b) It shall be a criminal offense, punishable by a fine of not more than $10,000.00 or imprisonment of not more than one year, or both, for any person to willfully violate any existing order of the Commissioner or, after receipt of a removal order, or an order assessing a penalty, to willfully perform any duty or exercise any power of or on behalf of any financial institution until the penalty has been satisfied, or otherwise satisfactorily resolved between the parties, or the removal or penalty order is vacated by the Commissioner or by a court of competent jurisdiction.

(c) An executive officer, director, or holder of a principal equity interest of a financial institution subject to the laws of this State under this title who, in violation of a standard established by section 14110 of this title, willfully misapplies any of the monies, funds, or credits of such financial institution, or any of the monies, funds, assets, or securities entrusted to the care or custody of such financial institution, or to the care or custody of such executive officer, director, or holder of a principal equity interest, shall be fined not more than $100,000.00 or imprisoned not more than five years, or both.
8 V.S.A. § 34104 — VT Code / Title 8 / Chapter 224 / Section 34104
§ 34104. Nonconforming activities; cessation
Status: in_force

(a) Applicability. If, as a result of a merger or conversion pursuant to this title, the continuing credit union is to be of a different type or of a different character than any one or all of the participating or converting institutions, such continuing credit union shall be subject to the conditions and limitations as set forth in this chapter.

(b) Plan for termination. The plan of merger or conversion shall set forth the method and schedule for terminating those activities not permitted by the laws of this State for the continuing credit union, but that were authorized for any of the participating or converting institutions.

(c) Effective date. The plan of merger or conversion shall state that from the effective date of such action, the continuing credit union shall not engage in any nonconforming activities, except to the extent necessary to fulfill obligations existing prior to merger or conversion, pursuant to subsection (d) of this section.

(d) Compliance with limitations. If, as a result of such merger or conversion, the continuing credit union exceeds any lending, investment, or other limitations imposed by this title, it shall conform to such limitations within such period of time as shall be established by the Commissioner.

(e) Divestiture. The Commissioner may, as a condition to such merger or conversion, require a nonconforming activity to be divested in accordance with such additional requirements as he or she may deem appropriate under the circumstances.
8 V.S.A. § 4113 — VT Code / Title 8 / Chapter 109 / Section 4113
§ 4113. Enforcement
Status: in_force

The Commissioner may, after notice and hearing, issue such rules and regulations as he or she deems appropriate for the supervision of this chapter. Whenever the Commissioner finds that there has been a violation of this chapter or any rules or regulations issued pursuant thereto, and after written notice thereof and hearing given to the insurer or other person authorized or licensed by the Commissioner, he or she shall set forth the details of his or her findings together with an order for compliance by a specified date. Such order shall be binding on the insurer and other person authorized or licensed by the Commissioner on the date specified unless sooner withdrawn by the Commissioner or a stay thereof has been ordered by a court of competent jurisdiction.
8 V.S.A. § 4183 — VT Code / Title 8 / Chapter 112 / Section 4183
§ 4183. Credits for assessments paid
Status: in_force

(a) A member insurer may offset against its premium tax liability to Vermont an assessment described in subsection 4179(h) of this chapter to the extent of 20 percent of the amount of the assessment for each of the five calendar years following the year in which the assessment was paid. In the event a member insurer should cease doing business, all uncredited assessments may be credited against its premium tax liability for the year it ceases doing business.

(b) A member insurer that is exempt from taxes referenced in subsection (a) of this section may recoup its assessments by a surcharge on its premiums in a sum reasonably calculated to recoup the assessments over a reasonable period of time, as approved by the Commissioner. Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax, the medical loss ratio, or agent commission. If a member insurer collects excess surcharges, the insurer shall remit the excess amount to the Association, and the excess amount shall be applied to reduce future assessments in the appropriate account.

(c) Any sums acquired by refund, pursuant to subsection 4179(f) of this chapter, from the Association that have been written off by contributing insurers and offset against premium taxes as provided in subsection (a) of this section, and are not then needed for purposes of this chapter, shall be paid by the insurer to the Commissioner, who shall deposit them with the State Treasurer for credit to the General Fund.
8 V.S.A. § 13401 — VT Code / Title 8 / Chapter 203 / Section 13401
§ 13401. Directors: number, election, qualifications, and term
Status: in_force

(a) The number of directors on the governing body of a mutual or cooperative financial institution may not be less than five, all of whom shall be residents of the financial institution's geographic area or an area proximate to that geographic area.

(b) The initial governing body shall be elected at the first meeting of the corporators or the organizers as provided for in section 13103 of this title, and the governing body shall be elected by a vote of the corporators or members at each annual meeting thereafter, provided that the organizational documents or internal governance documents may provide for classification of directors in accordance with Title 11 or 11A, depending on the form of organization.

(c) Vacancies on the governing body occurring during the year may be filled by the governing body until the next annual meeting of the corporators or members. A director so elected shall fill such position for the remainder of the term. Any vacancy that causes the number of directors to fall below the minimum required in subsection (a) of this section or in the institution's internal governance documents shall be filled promptly.

(d) The compensation of directors, which may include provision for payment of medical, surgical, and hospital expenses due to accident or illness in the same manner as provided for officers and employees, may be fixed by the corporators or members at any legal meeting thereof or, subject to the written approval of the Commissioner, such may be fixed by the governing body.
8 V.S.A. § 3634a — VT Code / Title 8 / Chapter 101 / Section 3634a
§ 3634a. Credit for reinsurance
Status: in_force

(a) Purpose. It is the purpose of this section to protect the interest of insureds, claimants, ceding insurers, assuming insurers, and the public generally. The General Assembly hereby declares its intent is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom they owe obligations. In furtherance of that State interest, the General Assembly hereby provides a mandate that upon the insolvency of a non-U.S. insurer or reinsurer that provides security to fund its U.S. obligations in accordance with this section, the assets representing the security shall be maintained in the United States and claims shall be filed with and valued by the state insurance Commissioner with regulatory oversight, and the assets shall be distributed in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic U.S. insurance companies. The General Assembly declares that the matters contained in this section are fundamental to the business of insurance in accordance with 15 U.S.C. §§ 1011-1012.

(b) Credit allowed a domestic ceding insurer. Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of subdivision (1), (2), (3), (4), (5), (6), or (7) of this subsection (b), provided that the Commissioner may adopt by rule or regulation pursuant to subdivision (e)(2) of this section specific additional requirements relating to any or all of the following: the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in subdivision (e)(2) of this section, or the circumstances pursuant to which credit will be reduced or eliminated. Credit shall be allowed under subdivision (1), (2), or (3) of this subsection (b) only with respect to cessions of those kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a U.S. branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Credit shall be allowed under subdivision (3) or (4) of this subsection (b) only if the applicable requirements of subdivision (8) of this subsection (b) have been satisfied.

(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this State.

(2) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the Commissioner as a reinsurer in this State. An accredited reinsurer is one that:

(A) files with the Commissioner evidence of its submission to this State's jurisdiction;

(B) submits to this State's authority to examine its books and records;

(C) is licensed to transact insurance or reinsurance in at least one state or, in the case of a U.S. branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one state;

(D) files annually with the Commissioner a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement;

(E) files with the Commissioner its charter, bylaws, and any other material required by the Commissioner;

(F) pays an initial fee of $500.00 and thereafter an annual fee of $200.00 on or before March 1 of each year; and

(G) demonstrates to the satisfaction of the Commissioner that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement, provided that at the time of its application it:

(i) maintains a surplus for policyholders that is not less than $20,000,000.00 and whose accreditation has not been denied by the Commissioner within 90 days following its submission; or

(ii) maintains a surplus for policyholders in an amount less than $20,000,000.00 and whose accreditation has been approved the Commissioner.

(3)(A) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is domiciled and licensed in, or in the case of a U.S. branch of an alien assuming insurer is entered through, a state that employs standards regarding credit for reinsurance substantially similar to those applicable under this statute and the assuming insurer or U.S. branch of an alien assuming insurer:

(i) maintains a surplus for policyholders in an amount not less than $20,000,000.00; and

(ii) submits to the authority of this State to examine its books and records.

(B) The requirement of subdivision (A)(i) of this subdivision (b)(3) does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system.

(4)(A) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified U.S. financial institution, as defined in subdivision (d)(2) of this section, for the payment of the valid claims of its U.S. ceding insurers, their assigns, and successors in interest. The assuming insurer shall report annually to the Commissioner information required by the Commissioner and substantially the same as that required to be reported on the National Association of Insurance Commissioners' Annual Statement form by licensed insurers to enable the Commissioner to determine the sufficiency of the trust fund. The assuming insurer shall submit to examination of its books and records by the Commissioner and bear the expense of the examination.

(B)(i) Credit for reinsurance shall not be granted under this subsection (b) unless the form of the trust and any amendments to the trust have been approved by:

(I) the commissioner of the state where the trust is domiciled; or

(II) the commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust.

(ii) The form of the trust and any trust amendments also shall be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in its trustees for the benefit of the assuming insurer's U.S. ceding insurers, their assigns, and successors in interest. The trust and the assuming insurer shall be subject to examination as determined by the Commissioner.

(iii) The trust shall remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. Not later than February 28 of each year, the trustee of the trust shall report to the Commissioner in writing the balance of the trust and a list of the trust's investments at the preceding year-end and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire prior to the following December 31.

(C) The following requirements shall apply to the following categories of assuming insurer:

(i) In the case of a single assuming insurer, the trust fund shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by U.S. ceding insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000.00, except at any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of U.S. ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including when applicable the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurer's liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 30 percent of the assuming insurer's liabilities attributable to reinsurance ceded by U.S. ceding insurers covered by the trust.

(ii)(I) In the case of a group including incorporated and individual unincorporated underwriters:

(aa) for reinsurance ceded under reinsurance agreements with an inception, amendment, or renewal date on or after January 1, 1993, the trust shall consist of a trusted account in an amount not less than the respective underwriters' several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any underwriter of the group;

(bb) for reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this section, the trust shall consist of a trusteed account in an amount not less than the respective underwriters' several insurance and reinsurance liabilities attributable to business written in the United States; and

(cc) in addition to the trusts specified in subdivisions (aa) and (bb) of this subdivision (C)(ii)(I), the group shall maintain in trust a trusteed surplus of which $100,000,000.00 shall be held jointly for the benefit of U.S. domiciled ceding insurers of any member of the group for all years of the account.

(II) The incorporated members of the group shall not engage in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group's domiciliary regulator as are the unincorporated members.

(III) Within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, the group shall provide to the Commissioner an annual certification of the solvency of each underwriter member by the group's domiciliary regulator or, if certification is unavailable, financial statements prepared by independent public accountants of each underwriter member of the group.

(iii) In the case of a group of incorporated insurers under common administration, the group shall:

(I) have continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation;

(II) maintain aggregate policyholders' surplus of at least $10,000,000,000.00;

(III) maintain a trust fund in an amount not less than the group's several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of such group;

(IV) maintain a joint trusteed surplus of which $100,000,000.00 shall be held jointly for the benefit of U.S. domiciled ceding insurers of any member of the group as additional security for liabilities; and

(V) within 90 days after its financial statements are due to be filed with the group's domiciliary regulator, make available to the Commissioner an annual certification of each underwriter member's solvency by the member's domiciliary regulator and financial statements of each underwriter member of the group prepared by an independent public accountant.

(5) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the Commissioner as a reinsurer in this State and secures its obligations in accordance with the requirements of this subdivision.

(A) In order to be eligible for certification, the assuming insurer shall:

(i) be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the Commissioner under subdivision (C) of this subdivision (5);

(ii) maintain minimum capital and surplus, or its equivalent, in an amount to be determined by the Commissioner by rule or regulation;

(iii) maintain financial strength ratings from two or more rating agencies deemed acceptable by the Commissioner by rule or regulation;

(iv) agree to submit to the jurisdiction of this State, appoint the Commissioner as its agent for service of process in this State, and agree to provide security for 100 percent of the assuming insurer's liabilities attributable to reinsurance ceded by U.S. ceding insurers if it resists enforcement of a final U.S. judgment;

(v) agree to meet applicable information filing requirements as determined by the Commissioner, both with respect to an initial application for certification and on an ongoing basis; and

(vi) satisfy any other requirements for certification deemed relevant by the Commissioner.

(B) An association, including incorporated and individual unincorporated underwriters, may be a certified reinsurer. In order to be eligible for certification, in addition to satisfying the requirements of subdivision (A) of this subdivision (5):

(i) The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents, net of liabilities, of the association and its members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the Commissioner to provide adequate protection.

(ii) The incorporated members of the association shall not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the association's domiciliary regulator as are the unincorporated members.

(iii) Within 90 days after its financial statements are due to be filed with the association's domiciliary regulator, the association shall provide to the Commissioner an annual certification by the association's domiciliary regulator of the solvency of each underwriter member or, if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association.

(C) The Commissioner shall create and publish a list of qualified jurisdictions under which an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for certification by the Commissioner as a certified reinsurer.

(i) In order to determine whether the domiciliary jurisdiction of a non-U.S. assuming insurer is eligible to be recognized as a qualified jurisdiction, the Commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and extent of reciprocal recognition afforded by the non-U.S. jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction shall agree to share information and cooperate with the Commissioner with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the Commissioner has determined that the jurisdiction does not adequately and promptly enforce final U.S. judgments and arbitration awards. Additional factors may be considered in the discretion of the Commissioner.

(ii) A list of qualified jurisdictions shall be published through the NAIC committee process. The Commissioner shall consider this list in determining qualified jurisdictions. If the Commissioner approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the Commissioner shall provide thoroughly documented justification in accordance with criteria to be developed by rule or regulation.

(iii) U.S. jurisdictions that meet the requirement for accreditation under the NAIC financial standards and accreditation program shall be recognized as qualified jurisdictions.

(iv) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction, the Commissioner has the discretion to suspend the reinsurer's certification indefinitely, in lieu of revocation.

(D) The Commissioner shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the Commissioner by rule or regulation. The Commissioner shall publish a list of all certified reinsurers and their ratings.

(E) A certified reinsurer shall secure obligations assumed from U.S. ceding insurers under this subsection (b) at a level consistent with its rating, as specified in rules or regulations adopted by the Commissioner.

(i) In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the Commissioner and consistent with the provisions of subsection (c) of this section or in a multibeneficiary trust in accordance with subdivision (4) of this subsection (b), except as otherwise provided in this subdivision.

(ii) If a certified reinsurer maintains a trust to fully secure its obligations subject to subdivision (4) of this subsection (b) and chooses to secure its obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this subsection (b) or comparable laws of other U.S. jurisdictions and for its obligations subject to subdivision (4) of this subsection. It shall be a condition to the grant of certification under this subdivision (b)(5) that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the Commissioner with principal regulatory oversight of each such trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust any deficiency of any other such trust account.

(iii) The minimum trusteed surplus requirements provided in subdivision (4) of this subsection (b) are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this subdivision (5)(E), except that such trust shall maintain a minimum trusteed surplus of $10,000,000.00.

(iv) With respect to obligations incurred by a certified reinsurer under this subdivision (5)(E), if the security is insufficient, the Commissioner shall reduce the allowable credit by an amount proportionate to the deficiency and has the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer's obligations will not be paid in full when due.

(v) For purposes of this subdivision (5), a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure 100 percent of its obligations.

(I) As used in this subdivision (5), the term “terminated” refers to revocation, suspension, voluntary surrender, and inactive status.

(II) If the Commissioner continues to assign a higher rating as permitted by other provisions of this section, this requirement does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.

(F) If an applicant for certification has been certified as a reinsurer in an NAIC-accredited jurisdiction, the Commissioner has the discretion to defer to that jurisdiction's certification and has the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer shall be considered to be a certified reinsurer in this State.

(G) A certified reinsurer that ceases to assume new business in this State may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this subsection (b), and the Commissioner shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business.

(6)(A) Credit shall be allowed when the reinsurance is ceded to an assuming insurer meeting each of the conditions set forth below:

(i) The assuming insurer shall have its head office or be domiciled in, as applicable, and be licensed in a reciprocal jurisdiction. As used in this section, “reciprocal jurisdiction” means a jurisdiction that meets one of the following:

(I) a non-U.S. jurisdiction that is subject to an in-force covered agreement with the United States, each within its legal authority or, in the case of a covered agreement between the United States and European Union, is a member state of the European Union. As used in this subdivision (b)(6), a “covered agreement” means an agreement entered into pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. §§ 313 and 314, that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this State or for allowing the ceding insurer to recognize credit for reinsurance;

(II) a U.S. jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation program; or

(III) a qualified jurisdiction, as determined by the Commissioner pursuant to subdivision (5)(C) of this subsection (b), that is not otherwise described in subdivision (6)(A)(i)(I) or (6)(A)(i)(II) of this subsection (b) and that meets certain additional requirements, consistent with the terms and conditions of in-force covered agreements, as specified by the Commissioner in rule or regulation.

(ii) The assuming insurer must have and maintain, on an ongoing basis, minimum capital and surplus, or its equivalent, calculated according to the methodology of its domiciliary jurisdiction, in an amount to be set forth in rule or regulation. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it must have and maintain, on an ongoing basis, minimum capital and surplus equivalents, net of liabilities, calculated according to the methodology applicable in its domiciliary jurisdiction, and a central fund containing a balance in amounts to be set forth in rule or regulation.

(iii) The assuming insurer must have and maintain, on an ongoing basis, a minimum solvency or capital ratio, as applicable, which will be set forth in rule or regulation. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it must have and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer has its head office or is domiciled, as applicable, and is also licensed.

(iv) The assuming insurer must agree and provide adequate assurance to the Commissioner, in a form specified in rule or regulation by the Commissioner, of the following:

(I) The assuming insurer must provide prompt written notice and explanation to the Commissioner if it falls below the minimum requirements set forth in subdivision (6)(A)(ii) or (6)(A)(iii) of this subsection (b) or if any regulatory action is taken against it for serious noncompliance with applicable law.

(II) The assuming insurer must consent in writing to the jurisdiction of the courts of this State and to the appointment of the Commissioner as agent for service of process. The Commissioner may require that consent for service of process be provided to the Commissioner and included in each reinsurance agreement. Nothing in this subdivision (6)(A)(iv)(II) shall limit, or in any way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws.

(III) The assuming insurer must consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgment was obtained.

(IV) Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurer's liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate.

(V) The assuming insurer must confirm that it is not presently participating in any solvent scheme of arrangement that involves this State's ceding insurers, and agree to notify the ceding insurer and the Commissioner and to provide security in an amount equal to 100 percent of the assuming insurer's liabilities to the ceding insurer, should the assuming insurer enter into such a solvent scheme of arrangement. Such security shall be in a form consistent with the provisions of subdivision (b)(5) and subsection (c) of this section and as specified by the Commissioner in rule or regulation.

(v) The assuming insurer or its legal successor must provide, if requested by the Commissioner, on behalf of itself and any legal predecessors, certain documentation to the Commissioner, as specified by the Commissioner in rule or regulation.

(vi) The assuming insurer must maintain a practice of prompt payment of claims under reinsurance agreements, pursuant to criteria set forth in rule or regulation.

(vii) The assuming insurer's supervisory authority must confirm to the Commissioner on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements set forth in subdivisions (ii) and (iii) of this subdivision (6)(A).

(viii) Nothing in this subdivision (b)(6)(A) precludes an assuming insurer from providing the Commissioner with information on a voluntary basis.

(B) The Commissioner shall timely create and publish a list of reciprocal jurisdictions.

(i) A list of reciprocal jurisdictions is published through the NAIC committee process. The Commissioner's list shall include any reciprocal jurisdiction as defined under subdivisions (A)(i)(I) and (II) of this subdivision (b)(6) and shall consider any other reciprocal jurisdiction included on the NAIC list. The Commissioner may approve a jurisdiction that does not appear on the NAIC list of reciprocal jurisdictions in accordance with criteria to be developed in rules or regulations adopted by the Commissioner.

(ii) The Commissioner may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction, in accordance with a process set forth in rules or regulations adopted by the Commissioner, except that the Commissioner shall not remove from the list a reciprocal jurisdiction as defined under subdivisions (A)(i)(I) and (II) of this subdivision (b)(6). Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance ceded to an assuming insurer that has its home office or is domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant to this section.

(C) The Commissioner shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this subdivision (b)(6) and to which cessions shall be granted credit in accordance with this subdivision. The Commissioner may add an assuming insurer to such list if an NAIC-accredited jurisdiction has added such assuming insurer to a list of such assuming insurers or if, upon initial eligibility, the assuming insurer submits the information to the Commissioner as required under subdivision (A)(iv) of this subdivision (b)(6) and complies with any additional requirements that the Commissioner may impose by rule or regulation, except to the extent that they conflict with an applicable covered agreement.

(D) If the Commissioner determines that an assuming insurer no longer meets one or more of the requirements under this subdivision (b)(6), the Commissioner may revoke or suspend the eligibility of the assuming insurer for recognition under this subdivision in accordance with procedures set forth in rule or regulation.

(i) While an assuming insurer's eligibility is suspended, no reinsurance agreement issued, amended, or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with subsection (c) of this section.

(ii) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the Commissioner and consistent with the provisions of subsection (c) of this section.

(E) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding ceded liabilities.

(F) Nothing in this subdivision (b)(6) shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in that reinsurance agreement, except as expressly prohibited by this section or other applicable law, rule, or regulation.

(G)(i) Credit may be taken under this subsection (b) only for reinsurance agreements entered into, amended, or renewed on or after January 1, 2021 and only with respect to losses incurred and reserves reported on or after the later of:

(I) the date on which the assuming insurer has met all eligibility requirements pursuant to subdivision (A) of this subdivision (b)(6); and

(II) the effective date of the new reinsurance agreement, amendment, or renewal.

(ii) This subdivision (b)(6)(G) does not alter or impair a ceding insurer's right to take credit for reinsurance, to the extent that credit is not available under this subdivision (b)(6), provided the reinsurance qualifies for credit under any other applicable provision of this section.

(iii) Nothing in this subdivision (b)(6) shall authorize an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement except as permitted by the terms of the agreement.

(iv) Nothing in this subdivision (b)(6) shall limit, or in any way alter, the capacity of parties to any reinsurance agreement to renegotiate the agreement.

(7) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of subdivision (1), (2), (3), (4), (5), or (6) of this subsection (b), but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction.

(8) If the assuming insurer is not licensed or accredited or certified to transact insurance or reinsurance in this State, the credit permitted by subdivisions (3) and (4) of this subsection (b) shall not be allowed unless the assuming insurer agrees in the reinsurance agreements:

(A)(i) That in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give such court jurisdiction, and will abide by the final decision of such court or of any appellate court in the event of an appeal.

(ii) To designate the Commissioner or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding company.

(B) This subdivision (b)(8) is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if this obligation is created in the agreement.

(9) If the assuming insurer does not meet the requirements of subdivision (1), (2), (3), or (6) of this subsection (b), the credit permitted by subdivision (4) or (5) of this subsection (b) shall not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions:

(A) Notwithstanding any other provisions in the trust instrument to the contrary, if the trust fund is inadequate because it contains an amount less than the amount required by subdivisions (4)(B)–(D) of this subsection (b) or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund.

(B) The assets shall be distributed by and claims shall be filed with and valued by the commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies.

(C) If the commissioner with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the U.S. ceding insurers of the grantor of the trust, the assets or part thereof shall be returned by the commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement.

(D) The grantor shall waive any right otherwise available to it under U.S. law that is inconsistent with this subdivision (b)(9).

(10) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the Commissioner may suspend or revoke the reinsurer's accreditation or certification.

(A) The Commissioner must give the reinsurer notice and opportunity for hearing. The Commissioner may suspend or revoke a reinsurer's accreditation or certification without a hearing if:

(i) the reinsurer waives its right to hearing;

(ii) the Commissioner's order is based on regulatory action by the reinsurer's domiciliary jurisdiction or the voluntary surrender or termination of the reinsurer's eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under subdivision (5)(F) of this subsection (b); or

(iii) the Commissioner finds that an emergency requires immediate action, and a court of competent jurisdiction has not stayed the Commissioner's action.

(B) While a reinsurer's accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurer's obligations under the contract are secured in accordance with subsection (c) of this section. If a reinsurer's accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurer's obligations under the contract are secured in accordance with subdivision (5)(E) of this subsection (b) or subsection (c) of this section.

(11) Concentration risk.

(A) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the Commissioner within 30 days after reinsurance recoverables from any single assuming insurer or group of affiliated assuming insurers exceeds 50 percent of the domestic ceding insurer's last reported surplus to policyholders or after it is determined that reinsurance recoverables from any single assuming insurer or group of affiliated assuming insurers is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.

(B) A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the Commissioner within 30 days after ceding to any single assuming insurer or group of affiliated assuming insurers more than 20 percent of the ceding insurer's gross written premium in the prior calendar year or after it has determined that the reinsurance ceded to any single assuming insurer or group of affiliated assuming insurers is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.

(c) Asset or reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of subsection (b) of this section. An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of subsection (b) of this section shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer, provided that the Commissioner may adopt by rule or regulation pursuant to subdivision (e)(2) of this section specific additional requirements relating to or setting forth any or all of the following: the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements described in subdivision (e)(2) of this section, and the circumstances pursuant to which credit will be reduced or eliminated. The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with such assuming insurer as collateral for the payment of obligations thereunder, if such collateral is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or, in the case of a trust, held in a qualified U.S. financial institution, as defined in subdivision (d)(2) of this section. This security may be in the form of:

(1) cash;

(2) securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets;

(3) clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified U.S. financial institution as defined in subdivision (d)(1) of this section, which are effective not later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding company on or before the filing date of its annual statement;

(4) letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or

(5) any other form of collateral acceptable to the Commissioner.

(d) Qualified U.S. financial institutions.

(1) As used in subdivision (c)(3) of this section, a “qualified U.S. financial institution” means an institution that:

(A) is organized or, in the case of a U.S. office of a foreign banking organization, licensed under the laws of the United States or any state thereof;

(B) is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies; and

(C) has been determined by either the Commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Commissioner.

(2) A “qualified U.S. financial institution” means, for purposes of those provisions of this section specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that is:

(A) organized or, in the case of a U.S. branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers; and

(B) regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies.

(e) Rules and regulations.

(1) The Commissioner may adopt rules or regulations implementing the provisions of this section.

(2)(A) The Commissioner may adopt rules or regulations applicable to reinsurance agreements. Such rules or regulations may apply only to reinsurance relating to:

(i) life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits;

(ii) universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;

(iii) variable annuities with guaranteed death or living benefits;

(iv) long-term care insurance policies; or

(v) such other life and health insurance and annuity products as to which the NAIC adopts model regulatory requirements with respect to credit for reinsurance.

(B) A rule or regulation adopted pursuant to subdivision (A)(i) or (ii) of this subdivision (e)(2) may apply to any treaty that contains:

(i) policies issued on or after January 1, 2015; or

(ii) policies issued prior to January 1, 2015, if risk pertaining to such pre-2015 policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015; or both.

(3) A rule or regulation adopted pursuant to subdivision (2) of this subsection (e) may require the ceding insurer, in calculating the amounts or forms of security required to be held under regulations promulgated under this authority, to use the Valuation Manual adopted by the NAIC under Section 11B(1) of the NAIC Standard Valuation Law, including all amendments adopted by the NAIC and in effect on the date as of which the calculation is made, to the extent applicable.

(4) A rule or regulation adopted pursuant to subdivision (2) of this subsection (e) shall not apply to cessions to an assuming insurer that:

(A) meets the conditions set forth in subdivision (b)(6) of this section;

(B) is certified in this State; or

(C) maintains at least $250,000,000.00 in capital and surplus when determined in accordance with the NAIC Accounting Practices and Procedures Manual, including all amendments thereto adopted by the NAIC, excluding the impact of any permitted or prescribed practices; and is:

(i) licensed in at least 26 states; or

(ii) licensed in at least 10 states and licensed or accredited in a total of at least 35 states.

(5) The authority to adopt rules or regulations pursuant to subdivision (2) of this subsection (e) does not limit the Commissioner's general authority to adopt rules or regulations pursuant to subdivision (1) of this subsection (e).

(f) Reinsurance agreements affected. This section shall apply to all cessions after the effective date of this section under reinsurance agreements that have an inception, anniversary, or renewal date not less than six months after the effective date of this section.
8 V.S.A. § 5109 — VT Code / Title 8 / Chapter 139 / Section 5109
§ 5109. Sanctions
Status: in_force

Upon satisfactory evidence that any health maintenance organization has violated any law or regulation or in any way has failed in meeting its financial and contractual obligations to its members, including quality assurance as provided by 18 V.S.A. § 9414, the Commissioner may, in the Commissioner's discretion, pursue any one or more of the following courses of action:

(1) Suspend the certificate of authority to operate as a health maintenance organization under this chapter. During the period of suspension, the organization shall not enroll any additional members except new employees of any employer whose employees are enrolled in the health maintenance organization by virtue of their employment, newborn children, or other newly acquired dependents of existing members and shall not engage in any advertising or solicitation whatever.

(2) Revoke the certificate of authority to operate as a health maintenance organization under this chapter. When the certificate of authority is revoked, the organization shall proceed under the supervision of the Commissioner, immediately following the effective date of the order of revocation, to wind up its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the organization. It shall engage in no further advertising or solicitation whatsoever. The Commissioner may, by written order, permit such further operation of the organization as the Commissioner may find to be in the best interests of members to the end that members will be afforded the greatest practical opportunity to obtain continuing health care coverage.

(3) Impose an administrative penalty of not more than $5,000.00 for each and every unlawful act committed; each violation shall constitute a separate fineable offense.

(4) Issue an administrative order requiring the health maintenance organization: to cease or modify inappropriate conduct or practices by it or any of the personnel employed or associated with it; to fulfill its contractual and financial obligations to its members.

(5) When the Commissioner has cause to believe that grounds for the denial of an application for a certificate of authority exist or that grounds for the suspension or revocation of a certificate of authority exist, the Commissioner shall notify the health maintenance organization in writing specifically stating the grounds for denial, suspension, or revocation and fixing a time of at least 30 days thereafter for a hearing on the matter.
8 V.S.A. § 11301 — VT Code / Title 8 / Chapter 201 / Section 11301
§ 11301. Preservation of records
Status: in_force

(a) A Vermont financial institution, and a state financial institution with a branch in this State, shall keep those books, accounts, and records relating to all of its transactions that will enable the Commissioner to ensure full compliance with the laws of this State. Each such financial institution shall retain its business records for such periods as prescribed by the Commissioner by regulation.

(b) Any such financial institution may dispose of any record that has been retained for the period prescribed by or in accordance with the regulation for retention of records of its class and thereafter shall be under no duty to produce the record in any action or proceeding.

(c) Records required to be preserved and retained by law or regulation may be maintained in paper, photograph, microprocess, magnetic, digital, mechanical, or electronic media, or in or by any other information storage device or process that forms a durable medium providing reasonable assurances against tampering and degradation of any reproduction of the original record and that can be accurately transferred to paper in a legible written form within a reasonable time. Records maintained in a computer-based format shall be archival in nature only, so as to preclude the possibility of alteration of the content of the record by computer once the record has been transferred to that format. Any record reproduced from a record maintained in compliance with this subsection shall have the same force and effect as the original thereof and may be admitted in evidence equally with the original.
8 V.S.A. § 12602 — VT Code / Title 8 / Chapter 202 / Section 12602
§ 12602. Nondepository trust companies
Status: in_force

(a) A nondepository trust company has all the powers, duties, and obligations of a financial institution under this title, except as provided in this section. In the exercise of its powers and the conduct of its business, the nondepository trust company shall be subject to all the same fiduciary duties and obligations as a financial institution operating a trust department under chapter 204, subchapter 4 of this title.

(b) A nondepository trust company shall not have the power to solicit, receive, or accept money or its equivalent on deposit as a regular business within the meaning of subdivision 11101(11) of this title; shall not be required to obtain federal deposit insurance; shall not have the power to lend money, except in transactions reasonably related to and deriving from its service as fiduciary or its conduct of trust business; and shall not conduct any other business except that which is incidental to its trust business and which is otherwise consistent with the exercise of its fiduciary duties.

(c) No nondepository trust company, other than a national trust company authorized to engage in a trust business in this State, shall engage in a trust business in this State without first obtaining a certificate of authority from the Commissioner pursuant to this section and sections 11703, 12103, and 14403 of this title.

(d) Notwithstanding section 15101 of this title, without the prior approval of the Commissioner, a nondepository trust company that is authorized to do business in this State may open and occupy a trust office at any one or more locations in this State at which its financial institution holding company parent or any affiliate financial institution has an office, whether a main office or a branch office.

(e) Any other trust office of a nondepository trust company organized as a Vermont financial institution shall be established in this State only with the prior approval of the Commissioner as provided in subsection 11701(c) of this title.

(f) The establishment of trust offices by a nondepository trust company organized as a national trust company shall be governed by applicable federal law.

(g) The organizational documents of a nondepository trust company organized as a Vermont financial institution that are filed with the Secretary of State shall contain the following statement: “This organization is subject to the Vermont law on nondepository trust companies, section 12602 of this title, and does not have the power to solicit, receive, or accept money or its equivalent on deposit or to lend money except for lending reasonably related to and deriving from its service as fiduciary or its conduct of trust business.” This statement in the organizational documents of a nondepository trust company may not be amended.

(h) All of the outstanding equity interests of a nondepository trust company shall be owned directly, or indirectly through one or more subsidiaries, by a financial institution holding company.

(i) A nondepository trust company organized as a Vermont financial institution shall maintain minimum capital in accordance with this chapter and section 14104 of this title, except the Commissioner may by order or rule apply standards for the minimum capital required for a nondepository trust company that are different from those requirements for a universal financial institution organized under this title, based on the nature of the business.

(j) Funds received or held by a nondepository trust company organized as a Vermont financial institution while awaiting investment or distribution shall not be used by the nondepository trust company or any affiliate financial institution in the conduct of its business or deposited in such financial institution, except to the same extent, and subject to the same conditions and limitations, as would be otherwise permitted under this title if the nondepository trust company and affiliated financial institution were one and the same corporate entity. The account shall be held either in the name of the trust to which the cash belongs or in the name of the nondepository trust company and shall be composed entirely of cash belonging to trust accounts, the respective contributions of which are reflected in the books and records of the nondepository trust company.

(k) A nondepository trust company organized as a Vermont financial institution shall include as a part of its name the word “trust” unless otherwise approved by the Commissioner for good cause shown.

(l) A nondepository trust company organized as a Vermont financial institution shall be subject to regular examination and supervision by the Commissioner to the same extent as any other financial institution chartered under Vermont law.

(m) A nondepository trust company organized as a Vermont financial institution may convert to any other type of investor-owned financial institution pursuant to chapter 206 of this title.

(n)(1) At any time or times following the grant to a nondepository trust company of permission to engage in the trust business by the Commissioner, or in the case of a national trust company by its federal supervisory agency, the nondepository trust company may file a petition in the Probate Division of the Superior Court of the Probate District in which its main office is located requesting that it be substituted, except as may be specifically excluded in such petition, in every fiduciary capacity for any one or more of its affiliate financial institutions specified in the petition. The petition may be made ex parte and need not list the fiduciary capacities in which substitution is made. A copy of the petition shall be furnished to the Commissioner prior to filing with the Probate Division of the Superior Court and the Commissioner shall have standing to appear and object to the petition. Upon a finding that (A) the nondepository trust company has been granted permission to engage in the trust business by the Commissioner, or the federal supervisory agency if the nondepository trust company is a national trust company, and (B) each of the affiliate financial institutions for which the nondepository trust company seeks to be substituted as fiduciary has complied with the notification requirements in subdivision (2) of this subsection, the court shall enter an order substituting the nondepository trust company in every fiduciary capacity for each of its specified affiliate financial institutions, except as otherwise specified in the nondepository trust company's petition. If the court determines that the Commissioner's objection has merit, the court shall issue an appropriate order to address the Commissioner's objection. The petition made pursuant to this section shall be considered in a summary fashion by the court, and the court shall act on the petition within 30 days of filing. Upon entry of the court's substitution order, the nondepository trust company shall, without further act, be deemed substituted by operation of law in every such fiduciary capacity, except as may be specifically excluded in such petition. The substitution shall be evidenced by filing a copy of the order with the Clerk of the Vermont Probate Division of the Superior Court in each Probate District in which the affiliate financial institutions served in a fiduciary capacity prior to the entry of the order. The order shall be accompanied by written notification to the court of each fiduciary appointment previously made by the court that is affected by the substitution order and evidence of compliance with subdivision (5) of this subsection. The order of substitution shall be indexed in the records of the courts in the manner in which substitutions of fiduciaries are indexed.

(2) At least 30 days before the filing of the petition referred to in subdivision (1) of this subsection, but after regulatory approval under subsection (c) of this section has been granted, each of the affiliate financial institutions for which the nondepository trust company seeks to be substituted shall mail written notice of the proposed substitution to the principals of each trust account affected. The form of notice required by this subdivision shall be approved by the Commissioner and shall include a statement that the nondepository trust company is affiliated with its affiliate financial institutions, but is not a part of them, and shall include the name, mailing address, and telephone number of one or more officers, employees, or agents of the affiliate financial institution available during regular business hours to answer customer questions regarding the proposed substitution. The affiliate financial institution shall furnish an affidavit of the mailing of the notice to the Probate Division of the Superior Court in conjunction with the filing of the nondepository trust company's petition referred to in subdivision (1) of this subsection, and the affidavit shall constitute the affiliate financial institution's compliance with this subdivision. Following the mailing of the notice and prior to the effective date of the substitution order, each of the affiliate financial institutions shall furnish a copy of the notice to each prospective trust customer of the financial institution before the customer and the financial institution enter into a trust account relationship.

(3) Within 30 days after the entry of the substitution order referred to in subdivision (1) of this subsection, the nondepository trust company shall mail written notice of the substitution to the principals of each trust account affected. The notice shall specify that the nondepository trust company is affiliated with its affiliate financial institutions, but is not a part of them, and shall include the name, mailing address, and telephone number of one or more officers or employees of the nondepository trust company available during regular business hours to answer customer questions regarding the substitution.

(4) Each designation in a will, trust, or other instrument executed before or after the entry of an order of substitution, naming an affiliate financial institution as fiduciary, shall be deemed by operation of law to be a designation of the nondepository trust company, substituted pursuant to this section, without further act or amendment of the will, trust, or other instrument, unless the will, trust, or other instrument is executed after the date of entry of the order of substitution and specifically negates application of this section.

(5) If any affiliate financial institution for which the nondepository trust company has been substituted pursuant to this section has given bond in any fiduciary capacity, the nondepository trust company shall be required to furnish to the court or authority making the appointment a substitute bond in like amount and terms before the affiliate financial institution shall be released from liability on its bond.

(6) Any affiliate financial institution for which the nondepository trust company has been substituted pursuant to this section shall account jointly with the nondepository trust company for the accounting period during which the effective date of the substitution occurs. Upon substitution pursuant to this section, the affiliate financial institution shall deliver to the nondepository trust company all assets addressed in the substitution order held by the affiliate financial institution as fiduciary and upon the substitution all the assets shall become the property of the nondepository trust company as fiduciary without the necessity of any instrument of transfer or conveyance.

(7) Upon substitution of the nondepository trust company pursuant to subdivision (1) of this subsection, the nondepository trust company shall pay fair consideration to each affiliate financial institution for which it has been substituted as fiduciary for the trust business it has acquired from the affiliate as a result of the substitution.

(o) To the extent not inconsistent with this section or with the limited scope of the banking powers of a nondepository trust company as contemplated in subsection (b) of this section, a nondepository trust company organized as a Vermont financial institution shall be subject to the laws of this State generally applicable to investor-owned financial institutions organized pursuant to chapter 202 of this title; provided, however, that the provisions of this chapter governing substitution of the nondepository trust company as fiduciary shall be exclusive and chapters 206, 207, and 208 of this title shall not apply to the substitution.

(p) A depository institution organized either as a Vermont financial institution or a national financial institution if authorized by its supervisory agency to exercise trust powers may be substituted as a fiduciary for any of its affiliate financial institutions under the same procedures, and the substitution shall be subject to the same conditions specified in this section, other than the prohibition against deposit-taking and the provisions of subsection (k) of this section, with respect to the substitution as fiduciary of a nondepository trust company for any of its affiliate financial institutions. The substitution procedures shall be exclusive and chapters 206, 207, and 208 of this title shall not apply to the substitution.

(q) Notwithstanding subsection 12201(a) of this title, the governing body of a nondepository trust company shall meet at least four times a year, including once quarterly.
8 V.S.A. § 8085 — VT Code / Title 8 / Chapter 154 / Section 8085
§ 8085. Minimum benefits and coverage; general
Status: in_force

(a) The Commissioner shall adopt rules establishing standards for minimum benefits and coverage that must be provided by a long-term care insurance policy to carry out the purposes of subsection (b) of this section. Nothing in this section prohibits an insurer from underwriting in accordance with that insurer's underwriting standards and the requirements of section 8086 of this title.

(b) No long-term care insurance policy may:

(1) be canceled, nonrenewed, or otherwise terminated on grounds other than by cancellation by the insured individual or certificate holder; nonpayment of premiums by the insured individual or certificate holder; all amounts potentially payable under the terms of the policy having been fully paid out; or except as provided for in section 8094 of this title;

(2) contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder;

(3) provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care;

(4) deny benefits or coverage on the basis that the need for services arises from a mental condition or Alzheimer's disease and related disorders;

(5) be issued without including a provision covering home health care benefits that complies with the standards for minimum benefits and coverage established by rule under subsection (a) of this section;

(6) fail to offer adult day care benefits, either in the policy or as an optional rider, that comply with the standards for minimum benefits and coverage established by rule under subsection (a) of this section;

(7) be offered without including an option for inflation adjustment protection that complies with the standards for minimum benefits and coverage established by rule under subsection (a) of this section;

(8) include a deductible or elimination period in excess of 100 days, computed in a manner prescribed by the Commissioner by rule, for any covered benefit;

(9) require payment of premiums more frequently than monthly; or

(10) be represented as having a premium described as level, fixed, or by similar words, if the premium is not, in fact, fixed and may be increased.
8 V.S.A. § 3761 — VT Code / Title 8 / Chapter 103 / Section 3761
§ 3761. Definitions
Status: in_force

As used in this subchapter, “operative date of the Valuation Manual” means January 1 of the first calendar year that the Valuation Manual as defined in subchapter 4A of this chapter is effective.
8 V.S.A. § 6048n — VT Code / Title 8 / Chapter 141 / Section 6048n
§ 6048n. Sponsored captives
Status: in_force

In addition to the provisions of sections 6048a-6048m of this subchapter, the provisions of this section shall apply to any sponsored captive insurance company licensed as a special purpose financial insurance company pursuant to this subchapter.

(1) A sponsored captive insurance company may be licensed as a special purpose financial insurance company pursuant to the provisions of this subchapter.

(2) The special purpose financial insurance company shall be subject to the provisions of subchapter 2 of this chapter. In the event of any conflict between the provisions of this subchapter and the provisions of subchapter 2 of this chapter, the provisions of this subchapter shall control.

(3) Unless otherwise approved in advance by the Commissioner, a participant in a special purpose financial insurance company shall be a ceding insurer. Any change in a participant shall be subject to prior approval by the Commissioner.

(4) The special purpose financial insurance company on behalf of a protected cell shall be entitled to assert the same claims and defenses in actions in law or equity as if the protected cell were a corporation established under Title 11A of the Vermont Statutes Annotated, including claims and defenses in actions at law or equity alleging alter ego, corporate veil piercing, offset, substantive consolidation, equitable subordination, or recoupment. In connection with the conservation, rehabilitation, or liquidation of a special purpose financial insurance company or one or more of its protected cells, the assets and liabilities of a protected cell shall at all times be kept separate from, and shall not be commingled with, those of other protected cells and the special purpose financial insurance company, and the assets of one protected cell shall not be used to satisfy the obligations or liabilities of another protected cell or the special purpose financial insurance company based on legal or equitable claims or defenses, including alter ego, piercing the corporate veil, offset, substantive consolidation, equitable subordination, or recoupment, unless such claims or defenses would apply to such protected cell if it were a special purpose finance insurance company without separate cells.

(5) Notwithstanding subdivision 6034(1) of this chapter, the special purpose financial insurance company may issue securities to any person approved in advance by the Commissioner.

(6) Notwithstanding section 6048g of this subchapter, the special purpose financial insurance company shall possess and thereafter maintain unimpaired paid-in capital and surplus of not less than $500,000.00.

(7) The “general account” of a sponsored captive insurance company licensed as a special purpose financial insurance company shall mean all assets and liabilities of the sponsored captive insurance company not attributable to a protected cell.

(8)(A) Any security issued by a special purpose financial insurance company with respect to a protected cell and any other contract or obligation of the special purpose financial insurance company with respect to a protected cell shall include the designation of such protected cell and shall include the following statement, or such other statement as may be required by the Commissioner:

(i) In the case of a security: “The holder of this security shall have no right or recourse against the special purpose financial insurance company and its assets other than against assets properly attributable to the designated protected cell and the special purpose financial insurance company's general account, to the extent permitted by Vermont law.”

(ii) In the case of a contract or obligation: “The counterparty to this contract or obligation shall have no right or recourse against the special purpose financial insurance company and its assets other than against assets properly attributable to the designated protected cell and the special purpose financial insurance company's general account, to the extent permitted by Vermont law.”

(B) Notwithstanding the requirements of this subdivision (8) and subject to the provisions of this chapter and other applicable law or regulation, the failure to include such disclosure, in whole or part, in such security, contract, or obligation with respect to a protected cell shall not serve as the sole basis for a creditor, ceding insurer, or any other person to have recourse against the general account of the special purpose financial insurance company in excess of the limitations provided for in subdivision (12)(E) of this subsection, or against the assets of any other protected cell.

(9) In addition to the provisions of section 6034 of this chapter, the special purpose financial insurance company shall be subject to the following with respect to its protected cells:

(A) The special purpose financial insurance company shall establish a protected cell only for the purpose of insuring or reinsuring risks of one or more reinsurance contracts with a ceding insurer or two or more affiliated ceding insurers, with the intent of facilitating an insurance securitization. A separate protected cell shall be established with respect to each separate securitization transaction; and

(B) A sale, an exchange, or another transfer of assets may not be made by the special purpose financial insurance company between or among any of its protected cells without the prior approval of the Commissioner.

(10) All attributions of assets and liabilities to the protected cells and the general account shall be in accordance with the plan of operation approved by the Commissioner. No other attribution of assets or liabilities may be made by a special purpose financial insurance company between its general account and any protected cell or between any protected cells. The special purpose financial insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell and shall attribute the related insurance securitization transaction, including any securities issued by the special purpose financial insurance company as part of the insurance securitization, to such protected cell. The rights, benefits, obligations, and liabilities of any securities attributable to such protected cell and the performance under such reinsurance contract and the related securitization transaction and any tax benefits, losses, refunds, or credits allocated pursuant to a tax allocation agreement to which the special purpose financial insurance company is a party, including any payments made by or due to be made to the special purpose financial insurance company pursuant to the terms of such agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract and the insurance securitization transaction that are attributed to such protected cell.

(11) For purposes of applying the provisions of chapter 145 of this title to a sponsored captive insurance company licensed as a special purpose financial insurance company, the definition of “insolvency” and “insolvent” in subdivision 6048c(2) of this title shall be applied separately to each protected cell and to the special purpose financial insurance company's general account.

(12) In addition to the provisions of section 6048m of this chapter:

(A) Except as otherwise modified in this section, the terms and conditions set forth in chapter 145 of this title pertaining to administrative supervision of insurers and the rehabilitation, receiverships, and liquidation of insurers apply in full to special purpose financial insurance companies or any of the special purpose financial insurance company's protected cells, independently, without causing or otherwise effecting a conservation, rehabilitation, receivership, or liquidation of the special purpose financial insurance company or another protected cell that is not otherwise insolvent.

(B) Notwithstanding the provisions of chapter 145 of this title, and without causing or otherwise effecting the conservation or rehabilitation of an otherwise solvent protected cell of a special purpose financial insurance company and subject to the provisions of subdivision (G)(v) of this subdivision (12), the Commissioner may apply by petition to the Superior Court for an order authorizing the Commissioner to conserve, rehabilitate, or liquidate a special purpose financial insurance company domiciled in this State on one or more of the following grounds:

(i) embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the special purpose financial insurance company intended to be used to pay amounts owed to the ceding insurer or the holders of special purpose financial insurance company securities; or

(ii) the special purpose financial insurance company is insolvent; or

(iii) the holders of a majority in outstanding principal amount of each class of special purpose financial insurance company securities attributable to each particular protected cell requests or consents to conservation, rehabilitation, or liquidation pursuant to the provisions of this subchapter.

(C) Notwithstanding the provisions of chapter 145 of this title, the Commissioner may apply by petition to the Superior Court for an order authorizing the Commissioner to conserve, rehabilitate, or liquidate one or more of a special purpose financial insurance company's protected cells, independently, without causing or otherwise effecting a conservation, rehabilitation, receivership, or liquidation of the special purpose financial insurance company generally or another of its protected cells, on one or more of the following grounds:

(i) embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the special purpose financial insurance company attributable to the affected protected cell or cells intended to be used to pay amounts owed to the ceding insurer or the holders of special purpose financial insurance company securities of the affected protected cell or cells; or

(ii) the affected protected cell is insolvent; or

(iii) the holders of a majority in outstanding principal amount of each class of special purpose financial insurance company securities attributable to that particular protected cell request or consent to conservation, rehabilitation, or liquidation pursuant to the provisions of this subchapter.

(D) Except where consent is given as described in subdivisions (B)(iii) and (C)(iii) of this subdivision (12), the Court may not grant relief provided by subdivision (B) or (C) of this subdivision (12) unless, after notice and a hearing, the Commissioner, who shall have the burden of proof, establishes by clear and convincing evidence that relief must be granted. The Court's order may be made in respect of one or more protected cells by name, rather than the special purpose financial insurance company generally.

(E) Notwithstanding another provision in this title, regulations adopted under this title, or another applicable law or regulation, upon any order of conservation, rehabilitation, or liquidation of a special purpose financial insurance company, or one or more of the special purpose financial insurance company's protected cells, the receiver shall manage the assets and liabilities of the special purpose financial insurance company or the applicable protected cell pursuant to the provisions of this subchapter. The assets attributable to one protected cell shall not be applied to the liabilities attributable to another protected cell, unless an asset or liability is attributable to more than one protected cell, in which case the receiver shall deal with the asset or liability in accordance with the terms of any relevant governing instrument or contract. Recourse to the special purpose financial insurance company's general account in connection with the conservation, rehabilitation, or liquidation of a protected cell shall be limited to the greater of the amount of assets in the general account as of the date such proceeding is commenced or the required minimum capital for the general account as of the date such proceeding is commenced. Assets attributable to one protected cell shall not be set off against the liabilities attributable to another protected cell, and assets attributable to the special purpose financial insurance company's general account shall not be set off against the liabilities attributable to any protected cell except to the extent provided in the preceding sentence. Relief shall not be granted nor shall any order be issued based on equitable theories of recovery, including substantive consolidation, equitable subordination, or recoupment, to attach or seize the assets of any solvent protected cell for the benefit of another protected cell or special purpose financial insurance company, or to pierce the corporate veil of any protected cell, in connection with the conservation, rehabilitation, or liquidation of a special purpose financial insurance company or one or more protected cells, unless such equitable theories, attachment, seizure, or corporate veil piercing would apply to such cell if it were a special purpose financial insurance company without separate cells.

(F) With respect to amounts recoverable under a reinsurance contract, the amount recoverable by the receiver of a special purpose financial insurance company must not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the ceding insurer, notwithstanding another provision in the contract or other documentation governing the insurance securitization.

(G) Notwithstanding the provisions of chapter 145 of this title or other laws of this State:

(i) An application or petition, or a temporary restraining order or injunction issued pursuant to the provisions of chapter 145 of this title, with respect to a ceding insurer, does not prohibit the transaction of business by a special purpose financial insurance company with the ceding insurer, including any payment by a special purpose financial insurance company made pursuant to a security issued by a special purpose financial insurance company with respect to a protected cell, or any action or proceeding against a special purpose financial insurance company or its assets.

(ii) The commencement of a summary proceeding or other interim proceeding commenced before a formal delinquency proceeding with respect to a special purpose financial insurance company, and any order issued by the Court, does not prohibit the payment by a special purpose financial insurance company made pursuant to a security issued by a special purpose financial insurance company with respect to a protected cell or special purpose financial insurance company contract or the special purpose financial insurance company from taking any action required to make the payment.

(iii) A receiver of a ceding insurer may not void a nonfraudulent transfer by the ceding insurer to a special purpose financial insurance company of money or other property made pursuant to a reinsurance contract.

(iv) A receiver of a special purpose financial insurance company may not void a nonfraudulent transfer by the special purpose financial insurance company of money or other property made to a ceding insurer pursuant to a reinsurance contract or made to or for the benefit of any holder of a special purpose financial insurance company security issued with respect to a protected cell, or a special purpose financial insurance company security.

(v) In the event of an insolvency of a special purpose financial insurance company where one or more protected cells remain solvent, the Commissioner shall separate the special purpose financial insurance company's solvent protected cells from the insolvent special purpose financial insurance company, shall allow on petition of the sponsor for the conversion of such solvent protected cells into one or more special purpose financial insurance companies, and shall issue such orders as the Commissioner deems necessary to protect the solvency of the remaining solvent protected cells. In the event of an insolvency of a protected cell, the special purpose financial insurance company's assets shall be accounted for and managed in compliance with subdivision (E) of this subdivision (12) and the other laws of this State.

(H) Subdivision (G) of this subdivision (12) does not prohibit the Commissioner from taking any action permitted under chapter 145 of this title with respect only to the conservation or rehabilitation of a special purpose financial insurance company with protected cell or cells, provided the Commissioner would have had sufficient grounds to seek to declare the special purpose financial insurance company insolvent; subject to and without otherwise affecting the provisions of subdivision (G)(v) of this subdivision (12). In this case, with respect to the solvent protected cell or cells, the Commissioner may not prohibit payments made by the special purpose financial insurance company pursuant to the special purpose financial insurance company security, reinsurance contract, or otherwise made under the insurance securitization transaction that are attributable to these protected cell or cells or prohibit the special purpose financial insurance company from taking any action required to make these payments.

(I) With the exception of the fulfillment of the obligations under a special purpose financial insurance company contract, and notwithstanding another provision of this title or other laws of this State, the assets of a special purpose financial insurance company, including assets held in trust, shall not be consolidated with or included in the estate of a ceding insurer in any delinquency proceeding against the ceding insurer pursuant to the provisions of this title for any purpose, including distribution to creditors of the ceding insurer.
8 V.S.A. § 4750 — VT Code / Title 8 / Chapter 130 / Section 4750
§ 4750. Insurer anti-fraud plans
Status: in_force

(a) Every insurer with direct written premiums shall prepare, implement, and maintain an insurance anti-fraud plan. Each insurer's anti-fraud plan shall outline specific procedures, appropriate to the type of insurance the insurer writes in this State, to:

(1) Prevent, detect, and investigate all forms of insurance fraud, including fraud involving the insurer's employees or agents; fraud resulting from misrepresentations in the application, renewal, or rating of insurance policies; claims fraud; and security of the insurer's data processing systems.

(2) Educate appropriate employees on fraud detection and the insurer's anti-fraud plan.

(3) Provide for the hiring of or contracting for fraud investigators.

(4) Report insurance fraud to appropriate law enforcement and regulatory authorities in the investigation and prosecution of insurance fraud.

(5) Where appropriate, pursue restitution for financial loss caused by insurance fraud.

(6) Ensure that applicable State and federal privacy laws are complied with and that the confidential personal and financial information of consumers and insureds is protected.

(7) Comply with such other procedures as the Commissioner may require by rule.

(b) The Commissioner may require an insurer to file annually its anti-fraud plan with the Department and an annual summary of the insurer's anti-fraud activities and results, including misclassification and miscoding. A workers' compensation insurer shall file an anti-fraud plan with the Department of Labor, including information about fraud investigations, referrals, or prosecutions involving Vermont workers' compensation claims, misclassifications, and miscoding, if requested by the Commissioner of Labor. Information regarding fraud investigations and referrals shall not be public unless the Commissioner of Labor or the Attorney General commences administrative or criminal proceedings. As used in this subsection:

(1) “Misclassification” means improperly classifying employees as independent contractors for the purposes of workers' compensation insurance or unemployment insurance, as the context dictates.

(2) “Miscoding” means the improper categorization of employees under the National Council on Compensation Insurance (NCCI) worker classification codes, which account for varying levels of risk attributable to different job types for the purposes of determining workers' compensation insurance premiums.

(c) This section confers no private rights of action. This section does not affect private rights of action conferred under other laws or court decisions.

(d) Enforcement. Notwithstanding any other provision of this title, the following are the exclusive monetary penalties for violation of this section. Insurers that fail to prepare, implement, maintain, or submit to the Department of Financial Regulation an insurance anti-fraud plan are subject to a penalty of $500.00 per day, not to exceed $10,000.00.
8 V.S.A. § 11203 — VT Code / Title 8 / Chapter 201 / Section 11203
§ 11203. Special hours
Status: in_force

In addition to the hours of each banking day under subsection 11202(a) of this title, a Vermont or state depository institution may have special hours on banking or other than banking days when it is open in a limited capacity for certain definite and stated transactions or purposes only, constituting substantially less than all of its banking functions. A copy of such schedule of special hours shall be filed with the Commissioner. The payment, certification, or acceptance of a check or other negotiable instrument or any other transaction by such financial institution shall be valid, notwithstanding it was done or performed during such special hours on other than a banking day. A Vermont or state depository institution with special hours on other than a banking day shall not constitute such day a “banking day,” for the purpose of notice, presentment, protest, notice of protest, or the time requirements for any act or action or notice to perfect or preserve rights accorded under 9A V.S.A. article 4.
8 V.S.A. § 3864 — VT Code / Title 8 / Chapter 105 / Section 3864
§ 3864. Penalty for violation of sections 3463 and 3862
Status: in_force

Such an insurance company failing to comply with the requirements of sections 3463 and 3862 of this title, within 60 days after notice from the Commissioner, shall reinsure its outstanding risks and proceed to liquidate its affairs, or the Commissioner may apply to the Superior Court for an injunction against such company and its officers. Subsequent proceedings shall be had in accordance with the general provisions of law relating to insurance companies.
8 V.S.A. § 3734 — VT Code / Title 8 / Chapter 103 / Section 3734
§ 3734. Incontestability and limitation of liability after reinstatement
Status: in_force

(a) A reinstated policy of life insurance or annuity contract may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance.

(b) When any life insurance policy or annuity contract is reinstated, such reinstated policy or contract may exclude or restrict liability to the same extent that such liability could have been or was excluded or restricted when the policy or contract was originally issued, and such exclusion or restriction shall be effective from the date of reinstatement.
8 V.S.A. § 4856 — VT Code / Title 8 / Chapter 132 / Section 4856
§ 4856. Impaired reciprocals
Status: in_force

(a) If the assets of a domestic reciprocal insurer are at any time insufficient to discharge its liabilities, other than any liability on account of funds contributed by the attorney or others, and to maintain the required surplus, its attorney shall immediately make up the deficiency or levy an assessment upon the subscribers for the amount needed to make up the deficiency, but subject to the limitation set forth in the power of attorney or policy.

(b) If the attorney fails to make up such deficiency or to make the assessment within 30 days after the Commissioner orders him or her to do so, or if the deficiency is not fully made up within 60 days after the date the assessment was made, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this title.

(c) If liquidation of such an insurer is ordered, an assessment shall be levied upon the subscribers for such an amount, subject to limits as provided by this chapter, as the Commissioner determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney or other persons, but including the reasonable cost of the liquidation.
8 V.S.A. § 7113 — VT Code / Title 8 / Chapter 147 / Section 7113
§ 7113. Plan review
Status: in_force

(a) The Commissioner may retain an actuary to conduct an actuarial study quantifying the liabilities under insurance policies and reinsurance agreements to be transferred to the assuming company under the plan and is authorized to retain any other legal, financial, and examination services from outside the Department necessary to assist in plan review.

(b) In reviewing the plan, the Commissioner shall take into account all written comments filed with respect to the plan, all evidence taken at the hearing, and any other factors the Commissioner reasonably deems relevant with respect to the plan. In all cases, the Commissioner shall make findings with respect to each of the following:

(1) the solvency of the assuming company before and after the implementation of the proposed plan;

(2) the adequacy of the assuming company's proposals described in the statement required under subdivision 7112(b)(16) of this chapter;

(3) the adequacy of the assuming company's consent to jurisdiction required under subdivision 7112(b)(17) of this chapter;

(4) the ability of the assuming company to comply with all requirements of the policies and inward reinsurance agreements, including the capacity of the assuming company regarding the administration of claims in process on or after the effective date of the transfer;

(5) whether any outward reinsurance agreement relating to any policy or policies in the closed block will be adversely affected by the transfer;

(6) whether the plan materially adversely affects the interests of any party or outward reinsurance counterparty, including the interests of any policyholder or inward reinsurance counterparty who has accepted or has been deemed to have accepted the plan;

(7) whether policyholders or inward reinsurance counterparties, together with their respective insurance policies and inward reinsurance agreements, have been excluded from the plan as required under subsections 7112(j) and (l) of this chapter; and

(8) the fairness of the plan to all parties.
8 V.S.A. § 3620 — VT Code / Title 8 / Chapter 101 / Section 3620
§ 3620. Prevention of insolvencies
Status: in_force

To aid in the detection and prevention of insurer insolvencies:

(1) It shall be the duty of the Board of Directors, upon majority vote, to notify the Commissioner of any information indicating any member insurer may be insolvent or in a financial condition hazardous to the policyholders or the public.

(2) The Board of Directors may, upon majority vote, request that the Commissioner order an examination of any member insurer that the Board in good faith believes may be in a financial condition hazardous to the policyholders or the public. Within 30 days of the receipt of such request, the Commissioner shall begin such examination. The examination may be conducted as a National Association of Insurance Commissioners examination or may be conducted by such persons as the Commissioner designates. The cost of such examination shall be paid by the Association and the examination report shall be treated as are other examination reports. In no event shall such examination report be released to the Board of Directors prior to its release to the public, but this shall not preclude the Commissioner from complying with subdivision (3) of this section. The Commissioner shall notify the Board of Directors when the examination is completed. The request for an examination shall be kept on file by the Commissioner but it shall not be open to public inspection prior to the release of the examination report to the public.

(3) It shall be the duty of the Commissioner to report to the Board of Directors when he or she has reasonable cause to believe that any member insurer examined or being examined at the request of the Board of Directors may be insolvent or in a financial condition hazardous to the policyholders or the public.

(4) The Board of Directors may, upon majority vote, make reports and recommendations to the Commissioner upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of any member insurer. Such reports and recommendations shall not be considered public documents.

(5) The Board of Directors may, upon majority vote, make recommendations to the Commissioner for the detection and prevention of insurer insolvencies.

(6) The Board of Directors shall, at the conclusion of any insurer insolvency in which the Association was obligated to pay covered claims, prepare a report on the history and causes of such insolvency, based on the information available to the Association, and submit such report to the Commissioner.
8 V.S.A. § 3316 — VT Code / Title 8 / Chapter 101 / Section 3316
§ 3316. Corporate governance; disclosure
Status: in_force

(a) Purpose. The purpose of this section is to:

(1) provide the Commissioner a summary of an insurer or insurance group's corporate governance structure, policies, and practices so the Commissioner may gain and maintain an understanding of the insurer's corporate governance framework;

(2) outline the requirements for completing a corporate governance annual disclosure with the Commissioner; and

(3) provide for the confidential treatment of the corporate governance annual disclosure and related information that contains confidential and sensitive information related to an insurer or insurance group's internal operations and proprietary and trade secret information that, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage.

(b) Scope. This section shall not be construed to prescribe or impose corporate governance standards and internal procedures beyond that which is required under applicable State corporate law. Nor shall it be construed to limit the Commissioner's authority, or the rights or obligations of third parties, under section 13 of this title.

(c) Application. The requirements of this section shall apply to all insurers domiciled in Vermont.

(d) Definitions. As used in this section:

(1) “Corporate Governance Annual Disclosure” or “CGAD” means a confidential report on corporate governance filed by the insurer or insurance group as required by this section.

(2) “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in subdivision 3681(6) of this title.

(3) “Insurer” means an insurance company that offers any of the types of insurance itemized under subsection 3301(a) of this chapter, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state. It shall also mean an insurance group.

(4) “ORSA Summary Report” means a report as defined in subdivision 3582(6) of this chapter.

(e) Disclosure.

(1) On or before June 1 of each year, beginning in the year 2016, an insurer shall submit to the Commissioner a CGAD, which contains the information described in subdivision (g)(2) of this section. Notwithstanding a request from the Commissioner made under subdivision (3) of this subsection, if the insurer is a member of an insurance group, the insurer shall submit the report required by this subsection to the Commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the National Association of Insurance Commissioners (NAIC).

(2) The CGAD shall include a signature of the insurer's chief executive officer or corporate secretary attesting to the best of that individual's belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the insurer's board of directors or the appropriate committee thereof.

(3) An insurer not required to submit a CGAD under this section shall do so upon the Commissioner's request.

(4) For purposes of completing the CGAD, the insurer may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level, depending upon how the insurer has structured its system of corporate governance. The insurer is encouraged to make the CGAD disclosures at the level at which: the insurer's risk appetite is determined; the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors is coordinated and exercised; or legal liability for failure of general corporate governance duties would be placed. If the insurer determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in level of reporting.

(5) The review of the CGAD and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent Handbook referenced in subdivision (1) of this subsection.

(6) Insurers providing information substantially similar to the information required by this section in other documents provided to the Commissioner, including proxy statements filed in conjunction with Form B requirements, or other state or federal filings provided to the Commissioner, shall not be required to duplicate that information in the CGAD, but shall only be required to cross reference the document in which the information is included.

(f) Rules. The Commissioner may adopt rules and issue orders necessary to carry out the provisions of this section.

(g)(1) CGAD contents. An insurer has discretion over the responses to CGAD inquiries, provided CGAD contains the material information necessary to permit the Commissioner to gain an understanding of the insurer's corporate governance structure, policies, and practices. The Commissioner may request additional information he or she deems material and necessary to provide the Commissioner with a clear understanding of the corporate governance policies, and the reporting or information system or controls implementing those policies.

(2) Notwithstanding subdivision (1) of this subsection, CGAD shall be prepared consistent with CGAD rules adopted by the Commissioner. Rules adopted by the Commissioner under this subdivision shall be consistent with the NAIC Model Regulation on CGAD. Documentation and supporting information shall be maintained and made available upon examination or upon request of the Commissioner.

(h) Confidentiality.

(1) Documents, materials, or other information, including CGAD, in the possession or control of the Department obtained or created by, or disclosed to the Commissioner or any other person under this section, are recognized by this State as being proprietary and to contain trade secrets. All such documents, materials, or other information are confidential and privileged, and are exempt from public inspection and copying under the Public Records Act. In addition, they are not subject to subpoena nor discovery, nor admissible in evidence in any private civil action. However, the Commissioner is authorized to use the documents, materials, or other information in furtherance of any regulatory or legal action brought as a part of the Commissioner's official duties. The Commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer. Nothing in this subsection shall be construed to require written consent of the insurer before the Commissioner may share or receive confidential documents, materials, or other CGAD-related information pursuant to subdivision (3) of this subsection for the purpose of assisting in the performance of the Commissioner's regular duties.

(2) Neither the Commissioner nor any person who receives documents, materials, or other CGAD-related information, through examination or otherwise, while acting under the authority of the Commissioner, or with whom such documents, materials, or other information are shared pursuant to this section, is permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subdivision (1) of this subsection.

(3) In order to assist in the performance of the Commissioner's regulatory duties, the Commissioner may:

(A) Upon request, share documents, materials, or other CGAD-related information including confidential and privileged documents, materials, or information subject to subdivision (1) of this subsection including proprietary and trade secret documents and materials with other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in subsection 3695(c) of this chapter, the NAIC, and with third-party consultants pursuant to subsection (i) of this section, provided the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and verifies in writing the legal authority to maintain confidentiality.

(B) Receive documents, materials, or other CGAD-related information, including otherwise confidential and privileged documents, materials or information, including proprietary and trade-secret information or documents, from regulatory officials of other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in subsection 3695(c) of this chapter, and from the NAIC, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, materials, or information.

(4) The sharing of information and documents by the Commissioner pursuant to this section does not constitute a delegation of regulatory authority or rulemaking, and the Commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this section.

(5) A waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials, or other CGAD-related information shall not occur as a result of disclosure of such CGAD-related information or documents to the Commissioner under this section or as a result of sharing as authorized under this section.

(i) NAIC and third-party consultants.

(1) The Commissioner may retain, at the insurer's expense, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner's staff he or she deems reasonably necessary to assist with the review of the CGAD and related information or with the insurer's compliance with this section.

(2) A person retained under this subsection is under the direction and control of the Commissioner and shall act in a purely advisory capacity.

(3) The NAIC and third-party consultants are subject to the same confidentiality standards and requirements as the Commissioner.

(4) As part of the retention process, a third-party consultant shall verify to the Commissioner, with notice to the insurer, that it is free of a conflict of interest and that it has internal procedures in place to monitor compliance with a conflict and to comply with the confidentiality standards and requirements of this section.

(5) A written agreement with the NAIC or a third-party consultant governing the sharing and use of information provided under this section shall contain the following provisions and expressly require the written consent of the insurer prior to making public such information:

(A) Specific procedures and protocols for maintaining the confidentiality and security of CGAD-related information shared with the NAIC or a third-party consultant pursuant to this subdivision (5).

(B) Procedures and protocols for sharing by the NAIC only with other state regulators from states in which an insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality.

(C) A provision specifying that ownership of the CGAD-related information shared with the NAIC or a third-party consultant remains with the Department and that use of such information by the NAIC or a third-party consultant is subject to the direction of the Commissioner.

(D) A provision prohibiting the NAIC and third-party consultants from storing the information in a permanent database after the underlying analysis is completed.

(E) A provision requiring the NAIC and third-party consultants to provide prompt notice to the Commissioner and to the insurer regarding any subpoena, request for disclosure, or request for production of the insurer's CGAD-related information.

(F) A requirement that the NAIC and third-party consultants consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or third-party consultant pursuant to this section.

(j) Sanctions. An insurer failing, without just cause, to timely file the CGAD as required by this section shall be required, after notice and hearing, to pay a penalty of $10,000.00 for each day's delay, to be recovered by the Commissioner, and the penalty so recovered shall be paid into the General Fund of this State. The maximum penalty under this section is $1,000,000.00. The Commissioner may reduce the penalty if the insurer demonstrates to the Commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.

(k) Severability clause. If any provision of this section other than subsection (h), or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this section that can be given effect without the invalid provision or application, and to that end the provisions of this section, with the exception of subsection (h), are severable.
8 V.S.A. § 7063 — VT Code / Title 8 / Chapter 145 / Section 7063
§ 7063. Actions by and against liquidator
Status: in_force

(a) Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in this State, no action shall be brought against the insurer or liquidator, whether in this State or elsewhere, nor shall any such existing actions be maintained or further presented after issuance of such order. The courts of this State shall give full faith and credit to injunctions against actions against the liquidator or the company or the continuation of existing actions against the liquidator or the company, when such injunctions are included in an order to liquidate an insurer issued pursuant to corresponding provisions in other states. Whenever, in the liquidator's judgment, protection of the estate of the insurer necessitates intervention in an action against the insurer that is pending outside this State, he or she may intervene in the action. The liquidator may defend any action in which he or she intervenes under this section at the expense of the estate of the insurer.

(b) The liquidator may, upon or after an order for liquidation, within two years or such time in addition to two years as applicable law may permit, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which such order is entered. Where, by agreement, a period of limitation is fixed for instituting a suit or proceeding upon any claim, or for filing any claim, proof of claim, proof of loss, demand, notice, or the like, or where in any proceeding, judicial or otherwise, a period of limitation is fixed, either in the proceeding or by applicable law, for taking any action, filing any claim or pleading, or doing any act, and where in any such case the period had not expired at the date of the filing of the petition; the liquidator may, for the benefit of the estate, take any such action or do any such act, required of or permitted to the insurer, within a period of 180 days subsequent to the entry of an order for liquidation, or within such further period as is shown to the satisfaction of the court not to be unfairly prejudicial to the other party.

(c) A statute of limitation or defense of laches shall not run with respect to any action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition. An action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the petition is denied.
8 V.S.A. § 11101 — VT Code / Title 8 / Chapter 201 / Section 11101
§ 11101. Definitions
Status: in_force

Except as otherwise specifically provided elsewhere in this title, and subject to such definitions as the Commissioner adopts by rule, the following terms have the following meanings for purposes of Parts 1, 2, and 5 of this title, unless the context clearly indicates otherwise:

(1) “Affiliate” means any company or person that, directly or indirectly, controls, is controlled by, or is under common control with another company.

(2) “Automated teller machine” or “ATM” means an electronic device at which a natural person may make deposits to an account by cash or check and perform other account transactions. Point-of-sale terminals, machines that only dispense cash, night depositories, and lobby deposit boxes are not automated teller machines.

(3) “Bank” or “bank and trust company” means any financial institution organized under the prior laws of this State that is authorized to exercise the powers and subject to the conditions and limitations on the exercise of those powers as set forth in chapter 204 of this title.

(4) “Bank credit card” means a card, plate, or other credit device issued by a bank or financial institution to a cardholder for the purpose of obtaining money, property, labor, or services on credit. The term “bank credit card” shall not be deemed to include a debit card; provided, however, that a credit card may include features of a debit card.

(5) “Bank holding company” shall have the same meaning as in 12 U.S.C. § 1841(a) and shall include a financial holding company as defined in 12 U.S.C. § 1841(p).

(6) “Banking day” shall mean each day that a financial institution is open to the public for the transaction of substantially all of its banking functions and shall be deemed a banking day for the purposes of all transactions with the financial institution under this title, Title 9A as it applies to financial institutions, and all other provisions of law applicable to financial institutions and the business of banking in this State.

(7) “Billing date” means the cycle date on the financial institution books and statements, which statements shall be mailed four days after the closing of the cycle.

(8) “Billing period” means the time interval between periodic statement dates. A billing period shall be considered a month or monthly if the last day of each billing period is on the same day of each month or does not vary by more than four days each month.

(9) “Borrower” means any person who is named as a borrower or debtor in a loan or extension of credit, including a drawer, endorser, or guarantor who is deemed a borrower under subsection 14301(d) of this title.

(10) “Branch” means any office of a financial institution at which deposits are received, checks paid, or money lent. A branch may include a messenger service, mobile branch, temporary facility, night depository (drop box), drive-in facility, or a seasonal agency. A branch does not include:

(A) a remote service unit;

(B) an office that does not permit members of the public to have physical access for purposes of making deposits, paying checks, or borrowing money;

(C) an office that is located at the site of, or is an extension of, an approved main or branch office;

(D) a loan production office; or

(E) deposit production office.

(11) “Business of banking,” “business of financial institutions,” or “banking business” means soliciting, receiving, or accepting money or its equivalent on deposit and the loaning of money as a regular business by any person.

(12)(A) “Capital,” for purposes of determining statutory limits that are based on the amount of a bank's or financial institution's capital or surplus:

(i) means the sum of the amount of common stock outstanding and unimpaired, the amount of perpetual preferred stock outstanding and unimpaired, and the amount of capital surplus, and undivided profits, for financial institutions organized as corporations;

(ii) means the sum of members' or partners' contributions and undistributed earnings of the company or partnership, for financial institutions organized as limited liability companies, limited partnerships, or limited liability partnerships; or

(iii) means the sum of capital deposits, surplus, and undivided earnings for all other financial institutions.

(B) For purposes of evaluating a Vermont depository institution's financial condition and safety and soundness, “capital” shall be determined in accordance with applicable federal regulations and interagency guidelines issued jointly by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Office of Thrift Supervision.

(13) “Charter” means the grant of authority to a financial institution under state or federal law to operate as a financial institution.

(14) “Closely related activities” mean those activities that are part of the business of banking, are closely related to the business of banking, are convenient and useful to the business of banking, are reasonably related to the operation of a financial institution, or are financial in nature or incidental to such financial activity. “Closely related activities” include business and professional services, data processing, courier and messenger services, credit-related activities, consumer services, real estate-related services, insurance and related services, securities brokerage, investment advice, securities underwriting, mutual fund activities, financial consulting, tax planning and preparation, community development and charitable activities, and any activities reasonably related or incidental to these activities. A “closely related activity” shall include:

(A) any activity that may be authorized from time to time for financial institutions or their service corporations or subsidiaries, including financial subsidiaries as defined in Subdivision 5136A(g)(3) of Chapter One of Title XLII of the Revised Statutes of the United States, to engage in pursuant to statutes administered by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, or the Office of Thrift Supervision; and

(B) any additional activities that the Commissioner by rule or order determines to be a “closely related activity.”

(15) “Commercial bank” means a bank or bank and trust company organized under prior law of this State or the laws of the United States, another country, or state, but does not include a special purpose financial institution or similar entity.

(16) “Commissioner” means the Commissioner of Financial Regulation.

(17) “Control” means that a person, directly or indirectly or acting through one or more other persons or through one or more subsidiaries, owns, controls, or has power to vote 25 percent or more of any class of equity interest of a financial institution; the person controls in any manner the election of a majority of the directors of the financial institution; or that the person directly or indirectly exercises a controlling influence over the management or policies of the financial institution. For depository institutions, control determinations may be made under the federal Bank Holding Company Act of 1956, 12 U.S.C. § 1841 et seq., or the federal Change in Bank Control Act, 12 U.S.C. 1817(j), or the Home Owners Loan Act, 12 U.S.C. § 1467a, as applicable in the circumstances. For institutions that are not depository institutions, control may be determined by the Commissioner.

(18) “Cooperative financial institution” means any financial institution organized pursuant to chapter 203 in which the earnings and net worth of the institution inure to the ultimate benefit of the members.

(19) “Day” means a calendar day unless otherwise expressly provided.

(20) “Debit card” means a card, plate, or other device issued by a bank or financial institution to a depositor for the purpose of drawing funds from a deposit account and that does not include any credit features other than (i) provisions to maintain a minimum deposit account balance, or (ii) protection against deposit account overdrafts.

(21) “Department” means the Vermont Department of Financial Regulation.

(22) “Deposit production office” means any place of business of a financial institution at which information is distributed or assistance provided in connection with the opening of new deposit accounts, provided that any initial deposit of funds is made at the main office or an authorized branch of the financial institution and not at such office.

(23) “Depositors” of a financial institution, solely for the purposes of chapter 210 of this title, include the holders of its regular savings accounts, other savings accounts, NOW accounts, certificates of deposit and other deposits having a fixed maturity, and all other accounts except noninterest bearing demand deposits.

(24) “Depository institution” shall mean an insured depository institution within the meaning of 12 U.S.C. § 1813(c)(2).

(25) “Director” means a member of the governing body of a financial institution.

(26) “Electronic banking” means conducting the business of banking and any closely related activity electronically.

(27) “Equity interest” means common stock, preferred stock, members' or partners' interests, or any other type of capital instrument that entitles the holder to vote pursuant to the financial institution's organizational documents; provided, however, that this definition shall not be deemed to prohibit or impair the creation of nonvoting classes of stock or other ownership interests in a financial institution.

(28) “Executive officer” shall have the same meaning as in Regulation O of the Federal Reserve Board, 12 C.F.R. Part 215.

(29) “Federal association” means a savings and loan association, savings bank, or other financial institution organized pursuant to the Act of Congress entitled “Home Owners' Loan Act of 1933”, as amended.

(30) “Federal Deposit Insurance Corporation” or “FDIC” shall have the same meaning as in 12 U.S.C. § 1811.

(31) “Fiduciary capacity” means every capacity specified in section 14401 of this title and every other capacity in which a financial institution acts or may act through its trust department pursuant to chapter 204, subchapter 4 of this title, including trusteeship with respect to collective investment funds.

(32) “Financial institution” means any Vermont financial institution, state financial institution, and national financial institution.

(33) “Financial institution holding company” means any company that has control over any financial institution or has control over any company that controls any financial institution and shall include bank holding companies as defined in subdivision (5) of this section and savings and loan holding companies as defined in 12 U.S.C. § 1467a.

(34) “Foreign bank” means any company organized under the laws of a foreign country, a territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands that engages directly in the banking business. “Foreign bank” includes foreign commercial banks, foreign merchant banks, and other foreign institutions that engage in usual banking activities in connection with the banking business in the countries where the foreign institutions are organized or operating.

(35) “Governing body” means the body that oversees the affairs of a financial institution. The governing body may also be referred to as the “board of directors,” “board of trustees,” “board of managers,” “partners' committee,” or “managing partners' committee,” depending upon the ownership structure of the financial institution.

(36) “Home state” means, for a national financial institution, the state in which the main office of the national financial institution is deemed to be located; for a state financial institution, the state by which the financial institution is chartered; and for a foreign bank, the state of the United States that the foreign bank has designated as its home state as determined in accordance with 12 U.S.C. § 3103(c).

(37) “Host state” means a state, other than the home state of a bank or financial institution, in which the bank or financial institution maintains or seeks to establish and maintain a branch.

(38) “Investor” means any person who has an equity interest in a financial institution and is entitled to vote under the institution's organizational documents; provided, however, that this definition shall not be deemed to prohibit or impair the ownership rights of the holders of nonvoting classes of stock or other ownership interests in a financial institution.

(39) “Investor-owned institution” means a financial institution organized under chapter 202 of this title.

(40) “Loan production” means the business of a financial institution in which loans or loan contracts are originated, but not approved, in this State.

(41) “Mutual financial institution” or “mutual institution” means any financial institution organized pursuant to chapter 203 of this title, in which the earnings and net worth of the institution inure to the ultimate benefit of the depositors.

(42) “Mutual holding company” means, solely for the purposes of chapter 210 of this title, the corporation that continues in the mutual form as the corporate parent of a stock financial institution resulting from the reorganization of a mutual financial institution pursuant to chapter 210 of this title.

(43) “Mutual holding company subsidiary financial institution” means, for purposes of chapter 210 of this title, an investor-owned financial institution organized under chapter 202 of this title to receive the assets and liabilities of a reorganizing mutual financial institution in accordance with the provisions of chapter 210 of this title and that will be a subsidiary of the mutual holding company upon consummation of a reorganization under chapter 210 of this title.

(44) “Mutual voter” means a corporator of a mutual financial institution or member of a cooperative financial institution.

(45) “National bank” means a commercial banking association or limited purpose banking association organized pursuant to the Act of Congress entitled “The National Bank Act,” as amended, or any subsequent Act of Congress relating to the same subject.

(46) “National financial institution” means a national bank as defined in subdivision (45) of this section or a federal association as defined in subdivision (29).

(47) “National trust company” means a national bank with powers generally limited to trust or fiduciary matters.

(48) “Nondepository trust company” means any Vermont financial institution with powers generally limited to trust or fiduciary matters or any national trust company, organized for the purpose of consolidation or reorganization of trust operations pursuant to section 12602 of this title or organized as a trust company under prior law.

(49) “Officer” means a person who has been given managerial or other high-level duties by the governing body or organizational documents of the financial institution. Depending upon the ownership structure of the institution, an officer may include a person with the title of chair, president, secretary, vice president, treasurer, manager, managing partner, or partner. For organizations that are not corporate in nature, the term “secretary” shall refer to the person to whom the governing body has delegated responsibility for the custody of the minutes of the meetings of the governing body and the equity interest holders, and for authenticating records of the organization.

(50) “Operating subsidiary” means an entity that is owned in whole or in part by a Vermont financial institution and whose activities are limited to the business of banking and closely related activities and in which a financial institution or financial institution holding company directly or indirectly holds more than 50 percent of the equity interests, but not including any equity interest:

(A) taken in satisfaction of a debt previously contracted; or

(B) held in a fiduciary capacity.

(51) “Organizational document” means the charter, certificate of organization, articles of incorporation, articles of association, articles of organization, certificate of limited liability partnership, bylaws, or other internal governance documents, operating agreement, partnership agreement, or any other similar document required to be filed with and approved by the Commissioner pursuant to section 12101 or 13101 of this title.

(52) “Principal” means, with respect to a trust account, the individual or entity to whom the financial institution ordinarily furnishes statements of account and other customer communications regarding such trust account.

(53) “Proprietary interests” of the depositors of a mutual or cooperative financial institution refer to the proportionate inchoate interests that such depositors have in the net worth of such financial institution, such interests maturing and being realized upon the financial institution's liquidation and after the claims of all creditors, including those of depositors as creditors, have been satisfied. “Proprietary interests” of the depositors of a subsidiary financial institution refer to the proportionate inchoate interests that such depositors have in the net worth of the mutual holding company of which such financial institution is a subsidiary, such interests maturing and being realized upon the mutual holding company's liquidation and after the claims of all creditors have been satisfied.

(54) “Real estate-related services” means real estate investment and development, including maintenance and management of improved real estate; real estate appraising; real estate settlement services; real estate brokerage activities with respect to properties owned by a financial institution authorized to do business in this State, a bank holding company, or subsidiaries thereof, regardless of how the property is acquired or for what purpose; or any real estate-related service authorized by this title or by rule or order of the Commissioner or any real estate-related service authorized for any financial institution chartered by or otherwise subject to the jurisdiction of the federal government.

(55) “Remote Service Unit” or “RSU” means an automated, unstaffed banking facility, such as an automated teller machine, cash dispensing machine, point-of-sale terminal, or other remote electronic facility, at which deposits are received, cash disbursed, or money lent.

(56) “Savings and loan association,” “association,” “cooperative savings and loan association,” or “foreign building and loan association” means a financial institution organized under the prior laws of this State that is authorized to exercise the powers and subject to the conditions and limitations on those powers set forth in chapter 204 of this title.

(57) “Savings bank” means a financial institution organized under the prior laws of this State that is authorized to exercise the powers and subject to the conditions and limitations on those powers set forth in chapter 204 of this title.

(58) “Service corporation” means a corporation substantially all the activities of which consist of originating, purchasing, selling, and servicing loans and participation interests in loan activities; or clerical, bookkeeping, accounting, and statistical or similar functions related to a financial institution or real estate activities; or management, personnel, marketing, or investment counseling related to a financial institution or real estate activities; or any activity authorized by the Commissioner by rule or order that has not been prohibited by federal law for service corporations.

(59) “Special purpose financial institution” means an institution authorized and operating pursuant to chapter 202, subchapter 6 of this title or other entity with the same or similar functions by whatever name that was established prior to January 1, 2001.

(60) “State financial institution” means a bank, bank and trust company, commercial bank, industrial loan corporation that is a depository institution with insurance by the Federal Deposit Insurance Corporation, limited or special purpose bank, special purpose financial institution, savings and loan association, savings bank, trust company, nondepository trust company, and universal financial institution, or other entity with the same or similar functions by whatever name that is organized under the laws of a state other than Vermont or by special act of the legislature of a state other than Vermont and is regulated by its home state in an equivalent manner to a Vermont financial institution; however, trust company as used in this subdivision shall not include an entity that is regulated by its home state in an equivalent manner to an independent trust company as defined in chapter 77 of this title. Nothing in this definition shall be deemed to be a grant of authority to any person to operate as a financial institution unless otherwise authorized under law.

(61) “State trust company” means a special purpose financial institution that is organized under the laws of a state other than Vermont and whose business is limited to trust or fiduciary powers as those powers are set forth in chapter 204, subchapter 4 of this title.

(62) “Subsidiary” means an organization owned or controlled by a financial institution or financial institution holding company.

(63) “Supervisory agency” means:

(A) the banking department or equivalent agency of a state;

(B) the Federal Deposit Insurance Corporation;

(C) the National Credit Union Administration;

(D) the Federal Reserve Board;

(E) the Office of Thrift Supervision;

(F) the Office of the Comptroller of the Currency;

(G) any successor agency to any of the agencies enumerated in this section.

(64) “Universal financial institution” means an investor-owned institution or a mutual or cooperative financial institution authorized by its organizational documents to exercise all the powers granted in chapter 204 of this title and includes any bank, bank and trust company, commercial bank, savings bank, and savings and loan association established prior to January 1, 2001, pursuant to this title, or by special act of the General Assembly.

(65) “Vermont financial institution” means a special purpose institution or universal financial institution organized under the laws of the State of Vermont.

(66) “Derivative transaction” means any transaction that is a contract, agreement, swap, warrant, note, or option that is based, in whole or in part, on the value of any interest in or any quantitative measure or the occurrence of any event relating to one or more commodities, securities, currencies, interest, or other rates, indices, or other assets.
8 V.S.A. § 8082 — VT Code / Title 8 / Chapter 154 / Section 8082
§ 8082. Definitions
Status: in_force

As used in this chapter:

(1) “Applicant” means:

(A) In the case of an individual long-term care insurance policy, the individual who seeks to contract for benefits.

(B) In the case of a group long-term care insurance policy, the proposed certificate holder.

(2) “Certificate” means, as used in this chapter, any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this State.

(3) “Commissioner” means the Commissioner of Financial Regulation.

(4) “Group long-term care insurance” means a long-term care insurance policy that is delivered or issued for delivery in this State and issued to any of the following:

(A) One or more employers or labor organizations or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof, or for members or former members or a combination thereof, of the labor organizations.

(B) Any professional, trade, or occupational association for its members or former or retired members, or combination thereof, if the association:

(i) is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation; and

(ii) has been maintained in good faith for purposes other than obtaining insurance.

(C)(i) An association or a trust or the trustees of a fund established, created, or maintained for the benefit of members of one or more associations. Prior to advertising, marketing, or offering the policy within this State, the association or associations or the insurer of the association or associations shall file evidence with the Commissioner that the association or associations have at the outset a minimum of 100 persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance, have been in active existence for at least one year, and have a constitution and bylaws that provide that:

(I) the association or associations hold regular meetings not less than annually to further purposes of the members;

(II) except for credit unions, the association or associations collect dues or solicit contributions from members; and

(III) the members have voting privileges and representation on the governing board and committees.

(ii) Forty-five days after the filing, the association or associations will be deemed to satisfy the organizational requirements, unless the Commissioner makes a finding that the association or associations do not satisfy those organizational requirements.

(D) A group other than as described in subdivisions (A), (B), and (C) of this subdivision (4), subject to a finding by the Commissioner that:

(i) the issuance of the group policy is not contrary to the best interests of the public;

(ii) the issuance of the group policy would result in economies of acquisition or administration; and

(iii) the benefits are reasonable in relation to the premiums charged.

(5) “Long-term care insurance” means any insurance policy or rider advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital. The term includes group and individual annuities and life insurance policies or riders that provide directly or supplement long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term also includes qualified long-term care insurance contracts. Long-term care insurance may be issued by insurers; fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations; or any similar organization to the extent it is otherwise authorized to issue life or health insurance. Long-term care insurance shall not include any insurance policy that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset-protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. With regard to life insurance, this term does not include life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement, and that provide the option of a lump-sum payment for those benefits where neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding any other provision of this chapter, any product advertised, marketed, or offered as long-term care insurance shall be subject to the provisions of this chapter.

(6) “Policy” means any policy, contract, subscriber agreement, rider, or endorsement delivered or issued for delivery in this State by an insurer; fraternal benefit society; nonprofit health, hospital, or medical service corporation; prepaid health plan; health maintenance organization; or any similar organization.

(7)(A) “Qualified long-term care insurance contract” or “federally tax-qualified long-term care insurance contract” means an individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended, as follows:

(i) The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this subdivision (7) by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.

(ii) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, as amended, or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this subdivision (7) do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payer. A contract shall not fail to satisfy the requirements of this subdivision (7) by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate.

(iii) The contract is guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended.

(iv) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in subdivision (v) of this subdivision (7)(A).

(v) All refunds of premiums and all policyholder dividends or similar amounts under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of the death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract.

(vi) The contract meets the consumer protection provisions set forth in Subsection 7702B(g) of the Internal Revenue Code of 1986, as amended.

(B) “Qualified long-term care insurance contract” or “federally tax-qualified long-term care insurance contract” also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Subsections 7702B(b) and (e) of the Internal Revenue Code of 1986, as amended.
8 V.S.A. § 3663 — VT Code / Title 8 / Chapter 101 / Section 3663
§ 3663. Minimum limitation on actions; void policy provisions
Status: in_force

A policy of fire, life, accident, liability, or burglary insurance, or an indemnity, surety, or fidelity contract or bond issued or delivered in this State by an insurance company doing business herein, shall not contain a condition or clause limiting the time of commencement of an action on such policy or contract to a period less than 12 months from the occurrence of the loss, death, accident, or default, nor a condition or clause making an award by appraisers, fixing the amount of loss by the insured or beneficiary in such policy or contract, a condition precedent to bringing or maintaining an action on such policy or contract. Any such conditions or clauses shall be null and void.
8 V.S.A. § 5028 — VT Code / Title 8 / Chapter 138 / Section 5028
§ 5028. Information required on contract
Status: in_force

Where Vermont is the home state of the insured, each surplus lines broker through whom a surplus lines insurance coverage is procured shall endorse on the outside of the policy and on any confirmation of the insurance, his or her name, address and license number, and the name and address of the producer, if any, through whom the business originated. Where such coverage is placed with an eligible surplus lines insurer there shall be stamped or written conspicuously in no smaller than 10-point boldface type of a contrasting color upon the first page of the policy and the confirmation of insurance, if any, “The company issuing this policy is a surplus lines insurer and the rates charged have not been approved by the Commissioner of Financial Regulation. Any default on the part of the insurer is not covered by the Vermont Insurance Guaranty Association.”
8 V.S.A. § 6007 — VT Code / Title 8 / Chapter 141 / Section 6007
§ 6007. Reports and statements
Status: in_force

(a) Captive insurance companies shall not be required to make any annual report except as provided in this chapter.

(b) Prior to March 1 of each year, and prior to March 15 of each year in the case of pure captive insurance companies, association captive insurance companies, sponsored captive insurance companies, industrial insured captive insurance companies, or agency captive insurance companies, each captive insurance company shall submit to the Commissioner a report of its financial condition, verified by oath of two of its executive officers or, in the case of a captive insurance company formed as a limited liability company or as a reciprocal insurer, of two individuals authorized by the governing board. Each captive insurance company shall report using generally accepted accounting principles, statutory accounting principles, or international financial reporting standards unless the Commissioner requires, approves, or accepts the use of any other comprehensive basis of accounting, in each case with any appropriate or necessary modifications or adaptations thereof required or approved or accepted by the Commissioner for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the Commissioner. As used in this section, statutory accounting principles shall mean the accounting principles codified in the NAIC Accounting Practices and Procedures Manual. Upon application for admission, a captive insurance company shall select, with explanation, an accounting method for reporting. Any change in a captive insurance company's accounting method shall require prior approval. Except as otherwise provided, each risk retention group shall file its report in the form required by subsection 3561(a) of this title, and each risk retention group shall comply with the requirements set forth in section 3569 of this title. The Commissioner shall by rule propose the forms in which pure captive insurance companies, association captive insurance companies, sponsored captive insurance companies, and industrial insured captive insurance companies shall report. Subdivision 6002(c)(3) of this title shall apply to each report filed pursuant to this section, except that such subdivision shall not apply to reports filed by risk retention groups.

(c) Any pure captive insurance company, association captive insurance company, sponsored captive insurance company, industrial insured captive insurance company, or agency captive insurance company may make written application for filing the required report on a fiscal year-end. If an alternative reporting date is granted:

(1) the annual report is due 75 days after the fiscal year-end; and

(2) in order to provide sufficient detail to support the premium tax return, the captive insurance company shall file prior to March 15 of each year for each calendar year-end, the premium schedule of the “Vermont Captive Insurance Company Annual Report.”
8 V.S.A. § 20104 — VT Code / Title 8 / Chapter 210 / Section 20104
§ 20104. Effect of reorganization; ownership and governance
Status: in_force

(a)(1) The organizational existence of the reorganizing mutual or cooperative financial institution shall not terminate, and the mutual holding company resulting from the reorganization shall be deemed to be a continuation of the entity of such financial institution, not as a depository institution but as a financial institution holding company. The depositors of the mutual or cooperative financial institution immediately prior to the reorganization shall be entitled to deposits in the mutual holding company subsidiary financial institution of like amounts, interest rate, and other terms, without interruption of interest, and such deposits shall continue to be insured by the Federal Deposit Insurance Corporation up to the maximum amount provided by law. The depositors of the mutual or cooperative financial institution immediately before the reorganization, shall, by virtue of the reorganization, have proprietary interests in the net worth of the mutual holding company of the same nature, rights, and proportions as the proprietary interests that they had in the mutual or cooperative financial institution immediately prior to the reorganization, in lieu of such former interests. Except as otherwise set forth in this section with respect to the rights of depositors, creditors of the reorganizing mutual or cooperative financial institution immediately prior to the reorganization shall be deemed to have such rights as creditors solely with respect to the mutual holding company subsidiary financial institution upon consummation of the reorganization.

(2) Except as otherwise specifically provided in the plan of reorganization adopted pursuant to section 20102 of this title, upon consummation of the reorganization into mutual holding company form, the mutual holding company subsidiary financial institution shall by operation of law be deemed to have succeeded to all rights of or in all tangible or intangible property, franchises, and interests of the mutual or cooperative financial institution, including appointments, designations, nominations, and all other rights and interests as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, and every other fiduciary capacity, in the same manner and to the same extent as such rights, franchises, and interests were held or enjoyed by the reorganizing mutual or cooperative financial institution immediately prior to the effective date of the reorganization, and without further additional assignment, appointment, or designation.

(b)(1) A mutual holding company shall not issue capital stock. Its net earnings and net worth shall inure to the benefit of the persons who are from time to time the savings depositors of its mutual holding company subsidiary financial institution and any other persons acquiring proprietary interests in the earnings and net worth of the mutual holding company, whether by merger or otherwise. Such net earnings may be distributed among such depositors and other persons at such times and in such equitable manner as the governing body of the mutual holding company, in its discretion, may determine. Apart from any such distributions, the proportionate proprietary interests of such depositors and other persons in the net earnings and net worth of the mutual holding company shall be realized only upon liquidation of the mutual holding company after the claims of all of its creditors have been satisfied. The proprietary interest of any depositor of the mutual holding company subsidiary financial institution in the net earnings and net worth of the mutual holding company shall terminate upon the complete withdrawal by such depositor of his or her accounts. Neither the depositors of the mutual holding company subsidiary financial institution nor any other persons acquiring proprietary interests in the mutual holding company shall have any voting rights in the organization.

(2) The powers of the mutual holding company shall vest in its corporators or governing body, as the case may be. The initial corporators or directors shall consist of such of the persons who were serving as corporators or directors of the reorganizing mutual or cooperative financial institution immediately prior to the reorganization and as are named in the plan of reorganization. Thereafter, the corporators or directors shall be chosen from time to time in the manner set forth in the internal governance documents of the mutual holding company. The management of the mutual holding company shall be vested in its governing body, who shall be elected by the corporators in the case of a mutual financial institution. The initial governing body shall consist of such of the persons who were serving as the directors of the mutual or cooperative financial institution immediately prior to the reorganization and as are named in the plan of reorganization. Such persons shall hold office until the first annual meeting of the corporators and until their successors have been chosen and qualified. The governing body shall hold an organizational meeting immediately following consummation of the reorganization for the adoption of internal governance documents and the election of officers in such manner as the internal governance documents may prescribe. Any action by a mutual holding company that, if taken by a business corporation, would require the approval of its shareholders under 11A V.S.A. chapter 10, 11, 12, or 14, shall require the vote of concurrence of the corporators of the mutual holding company and in such proportion of the corporators as would be required for the approval of similar action by shareholders of a business corporation.

(3) The general purpose of a mutual holding company shall be conducting and carrying on the business and activities of a financial institution holding company. A mutual holding company shall not take deposits. It shall have the general powers of business corporations as set forth in 11A V.S.A. § 3.02 and shall have the powers of, and be subject to the limitations on, bank holding companies under the federal Bank Holding Company Act of 1956, as amended or the Savings and Loan Holding Company Act, as amended, as the case may be. Without limiting the generality of the foregoing and subject to provisions of applicable state and federal law, a mutual holding company may:

(A) invest in the stocks and securities of any depository institution;

(B) acquire control of any depository institution;

(C) merge or consolidate with or otherwise acquire another mutual holding company;

(D) merge or consolidate any subsidiary of the mutual holding company with another subsidiary thereof or transfer all or a portion of the assets of one such subsidiary to another;

(E) make capital contributions and loans to its subsidiaries and affiliates and otherwise assist them financially;

(F) engage in, directly or indirectly through a subsidiary, any non-banking activity authorized for a bank holding company under state or federal law or regulation;

(G) issue capital debentures;

(H) pledge the common stock of its subsidiaries to secure the indebtedness of the mutual holding company, provided that the proceeds of such indebtedness are used to fund the business operations, or to effect other business purposes, of the mutual holding company or its subsidiaries; and

(I) sell or transfer the common stock of its mutual holding company subsidiary financial institution, provided that the Commissioner has approved the transaction, and provided further that it does not result in the mutual holding company holding less than 51 percent of the outstanding stock of the mutual holding company subsidiary financial institution.

(4) A mutual holding company may convert from mutual to investor-owned form subject to the same procedures and requirements as are applicable to the conversion of a mutual or cooperative financial institution to investor-owned form under chapter 206 of this title.

(5) The mutual holding company shall obtain the Commissioner's approval before entering into any transaction described in subdivision (b)(3)(B), (C), or (D) of this section. In addition to any other applicable law governing the approval of the transaction, the Commissioner shall disapprove any transaction that is unfair to the holders of the proprietary interests in the mutual holding company.
8 V.S.A. § 4072 — VT Code / Title 8 / Chapter 107 / Section 4072
§ 4072. Mental health and substance use disorder services
Status: in_force

(a) It is the goal of the General Assembly that treatment for mental conditions be recognized as an integral component of health care, that health insurance plans cover all necessary and appropriate medical services without imposing practices that create barriers to receiving appropriate care, and that integration of health care be recognized as the standard for care in this State.

(b) As used in this section:

(1) “Mental condition” means any condition or disorder involving psychiatric disabilities or substance use disorder that falls under any of the diagnostic categories listed in the mental disorders section of the International Classification of Diseases, as periodically revised.

(2) “Mental health provider” means any individual, corporation, facility, or institution certified or licensed by this State to provide mental health services, including a physician, nurse with recognized psychiatric specialties, hospital or other health care facility, psychologist, clinical social worker, mental health counselor, alcohol or drug abuse counselor, or an employee or agent of such provider acting in the course and scope of employment or an agency related to mental health services.

(3) “Rate, term, or condition” means any lifetime or annual payment limits, deductibles, co-payments, coinsurance, and any other cost-sharing requirements, out-of-pocket limits, visit limits, and any other financial component of health insurance coverage that affects the covered individual.

(c) A health insurance plan shall provide coverage for treatment of a mental condition and shall:

(1) not establish any rate, term, or condition that places a greater burden on a covered individual for access to treatment for a mental condition than for access to treatment for other health conditions, including no greater co-payment for primary mental health care or services than the co-payment applicable to care or services provided by a primary care provider under a covered individual's health insurance plan and no greater co-payment for specialty mental health care or services than the co-payment applicable to care or services provided by a specialist provider under a covered individual's health insurance plan;

(2) not exclude from its network or list of authorized providers any licensed mental health or substance use disorder treatment provider located within the geographic coverage area of the health insurance plan if the provider is willing to meet the terms and conditions for participation established by the health insurer;

(3) make any deductible or out-of-pocket limits required under a health insurance plan comprehensive for coverage of both mental and physical health conditions; and

(4) if the health insurance plan provides prescription drug coverage, ensure that at least one medication in each therapeutic class approved by the U.S. Food and Drug Administration for the treatment of substance use disorder, including for opioid use disorder, methadone, buprenorphine, and naltrexone, is available on the lowest cost-sharing tier of the plan's prescription drug formulary.

(d)(1)(A) A health insurance plan that does not otherwise provide for management of care under the plan, or that does not provide for the same degree of management of care for all health conditions, may provide coverage for treatment of mental conditions through a managed care organization, provided that the managed care organization is in compliance with rules adopted by the Commissioner that ensure that the system for delivery of treatment for mental conditions does not diminish or negate the purpose of this section. In reviewing policy rates and forms pursuant to section 4026 of this title, the Commissioner or the Green Mountain Care Board established in 18 V.S.A. chapter 220, as appropriate, shall consider the compliance of the policy with the provisions of this section.

(B) The rules adopted by the Commissioner shall ensure that:

(i) timely and appropriate access to care is available;

(ii) the quantity, location, and specialty distribution of health care providers is adequate;

(iii) administrative or clinical protocols do not serve to reduce access to medically necessary treatment for any covered individual;

(iv) utilization review and other administrative and clinical protocols do not deter timely and appropriate care, including emergency hospital admissions;

(v) in the case of a managed care organization that contracts with a health insurer to administer the health insurer's mental health benefits, the portion of a health insurer's premium rate attributable to the coverage of mental health benefits is reviewed under section 4026, 4513, 4584, or 5104 of this title to determine whether it is excessive, inadequate, unfairly discriminatory, unjust, unfair, inequitable, misleading, or contrary to the laws of this State;

(vi) the health insurance plan is consistent with the Blueprint for Health with respect to mental conditions;

(vii) a quality improvement project is completed annually as a joint project between the health insurance plan and its mental health managed care organization to implement policies and incentives to increase collaboration among providers that will facilitate clinical integration of services for medical and mental conditions, including:

(I) evidence of how data collected from the quality improvement project are being used to inform the practices, policies, and future direction of care management programs for mental conditions; and

(II) demonstration of how the quality improvement project is supporting the incorporation of best practices and evidence-based guidelines into the utilization review of mental conditions;

(viii) an up-to-date list of active mental health providers in the plan's network is available on the health insurer's and managed care organization's websites and provided to consumers upon request; and

(ix) the health insurers and managed care organizations make accessible to consumers the toll-free telephone number for the Department of Financial Regulation's consumer protection help line.

(C) Prior to the adoption of rules pursuant to this subdivision (d)(1), the Commissioner shall consult with the Commissioner of Mental Health and the task force established pursuant to subsection (h) of this section concerning:

(i) developing incentives and other measures addressing the availability of providers of care and treatment for mental conditions, especially in medically underserved areas;

(ii) incorporating nationally recognized best practices and evidence-based guidelines into the utilization review of mental conditions; and

(iii) establishing benefit design, infrastructure support, and payment methodology standards for evaluating the health insurance plan's consistency with the Blueprint for Health with respect to the care and treatment of mental conditions.

(2) A managed care organization providing or administering coverage for treatment of mental conditions on behalf of a health insurance plan shall comply with this section, sections 4064 and 4724 of this title, and 18 V.S.A. § 9414; with rules adopted pursuant to those provisions of law; and with all other obligations, under Title 18 and under this title, of the health insurance plan and the health insurer on behalf of which the managed care organization is providing or administering coverage. A violation of any provision of this section shall constitute an unfair act or practice in the business of insurance in violation of section 4723 of this title.

(3) A health insurer that contracts with a managed care organization to provide or administer coverage for treatment of mental conditions is fully responsible for the acts and omissions of the managed care organization, including any violations of this section or a rule adopted pursuant to this section.

(4) In addition to any other remedy or sanction provided for by law, if the Commissioner, after notice and an opportunity to be heard, finds that a health insurance plan or managed care organization has violated this section or any rule adopted pursuant to this section, the Commissioner may:

(A) assess a penalty on the health insurer or managed care organization under section 4726 of this title;

(B) order the health insurer or managed care organization to cease and desist in further violations;

(C) order the health insurer or managed care organization to remediate the violation, including issuing an order to the health insurer to terminate its contract with the managed care organization; and

(D) revoke or suspend the license of a health insurer or managed care organization, or permit continued licensure subject to such conditions as the Commissioner deems necessary to carry out the purposes of this section.

(5) As used in this subsection, the term “managed care organization” includes any of the following entities that provide or administer the coverage of mental health benefits on behalf of a health insurance plan:

(A) a mental health review agent as defined in section 4064 of this title;

(B) a health insurer or its delegate;

(C) a managed care organization, as defined in 18 V.S.A. § 9402, or its delegate; and

(D) any other person or entity that meets the definition of a managed care organization under 18 V.S.A. § 9402 or under rules adopted by the Commissioner.

(e) To be eligible for coverage under this section, the service shall be rendered:

(1) For treatment of a mental condition, either:

(A) by a licensed or certified mental health professional; or

(B) in a mental health facility qualified pursuant to rules adopted by the Secretary of Human Services or in an institution, approved by the Secretary of Human Services, that provides a program for the treatment of a mental condition pursuant to a written plan.

(2) For treatment of substance abuse disorder, either:

(A) by a licensed alcohol and drug abuse counselor or other person approved by the Secretary of Human Services based on rules adopted by the Secretary that establish standards and criteria for determining eligibility under this subdivision; or

(B) in an institution, approved by the Secretary of Human Services, that provides a program for the treatment of substance use disorder pursuant to a written plan. (Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.)
8 V.S.A. § 3701 — VT Code / Title 8 / Chapter 103 / Section 3701
§ 3701. Discriminations prohibited
Status: in_force

A life insurance company doing business in the State shall not make or permit to be made any distinction or unfair discrimination between individual insureds of the same class and of equal expectation of life as to:

(1) the amount of the premiums or the terms of payment thereof;

(2) the rate charged for policies of life or endowment insurance;

(3) the dividends or other benefits payable thereon; or

(4) any of the terms and conditions of the policies it issues.
8 V.S.A. § 2525 — VT Code / Title 8 / Chapter 79 / Section 2525
§ 2525. Relationship between licensee and authorized delegate
Status: in_force

(a) As used in this subchapter, “remit” means to make direct payments of money to a licensee or its representative authorized to receive the money, or to deposit the money in an entity identified as exempt under subdivision 2504(7) of this chapter, in an account specified by the licensee.

(b) Before a licensee is authorized to conduct business through an authorized delegate or allows a person to act as the licensee's authorized delegate, the licensee shall:

(1) adopt, and update as necessary, written policies and procedures reasonably designed to ensure that the licensee's authorized delegates comply with applicable state and federal law;

(2) enter into a written contract that complies with subsection (d) of this section; and

(3) conduct a reasonable risk-based background investigation sufficient for the licensee to determine whether the authorized delegate has complied and will likely comply with applicable state and federal law.

(c) An authorized delegate must operate in full compliance with this chapter.

(d) The written contract required by subsection (b) of this section must be signed by the licensee and the authorized delegate and, at a minimum, shall:

(1) appoint the person signing the contract as the licensee's authorized delegate with the authority to conduct money transmission on behalf of the licensee;

(2) set forth the nature and scope of the relationship between the licensee and the authorized delegate and the respective rights and responsibilities of the parties;

(3) require the authorized delegate to agree to fully comply with all applicable state and federal laws, rules, and regulations pertaining to money transmission, including this chapter and rules implementing this chapter, relevant provisions of the Bank Secrecy Act and the USA PATRIOT Act;

(4) require the authorized delegate to remit and handle money and monetary value in accordance with the terms of the contract between the licensee and the authorized delegate;

(5) impose a trust on money and monetary value net of fees received for money transmission for the benefit of the licensee;

(6) require the authorized delegate to prepare and maintain records as required by this chapter or rules implementing this chapter, or as reasonably requested by the Commissioner;

(7) acknowledge that the authorized delegate consents to examination or investigation by the Commissioner;

(8) state that the licensee is subject to regulation by the Commissioner and that, as part of that regulation, the Commissioner may suspend or revoke an authorized delegate designation or require the licensee to terminate an authorized delegate designation; and

(9) acknowledge receipt of the written policies and procedures required under subsection (b) of this section.

(e) If the licensee's license is suspended, revoked, terminated, nonrenewed, surrendered or expired, the licensee must, within five business days, provide documentation to the Commissioner that the licensee has notified all applicable authorized delegates of the licensee whose names are in a record filed with the Commissioner of the suspension, revocation, termination, nonrenewal, surrender, or expiration of a license. Upon suspension, revocation, termination, nonrenewal, or surrender of a license, applicable authorized delegates shall immediately cease to provide money transmission as an authorized delegate of the licensee.

(f) An authorized delegate of a licensee holds in trust for the benefit of the licensee all money net of fees received from money transmission. If any authorized delegate commingles any funds received from money transmission with any other funds or property owned or controlled by the authorized delegate, all commingled funds and other property shall be considered held in trust in favor of the licensee in an amount equal to the amount of money net of fees received from money transmission.

(g) An authorized delegate shall not use a subdelegate to conduct money transmission on behalf of a licensee.
8 V.S.A. § 2204a — VT Code / Title 8 / Chapter 73 / Section 2204a
§ 2204a. Mortgage loan originator prelicensing and relicensing education requirement
Status: in_force

(a) In order to meet the prelicensing education requirement for a mortgage loan originator, a person shall complete at least 20 hours of education approved in accordance with subsection (b) of this section, which shall include at least:

(1) three hours of federal law and regulations;

(2) three hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues;

(3) two hours of training related to lending standards for the nontraditional mortgage product marketplace; and

(4) two hours of Vermont law and regulations.

(b) For purposes of subsection (a) of this section, prelicensing education courses shall be reviewed and approved by the Nationwide Multistate Licensing System and Registry based upon reasonable standards. Review and approval of a prelicensing education course shall include review and approval of the course provider.

(c) Nothing in this section shall preclude any prelicensing education course, as approved by the Nationwide Multistate Licensing System and Registry, that is provided by the employer of the applicant or an entity which is affiliated with the applicant by an agency contract, or any subsidiary or affiliate of such employer or entity.

(d) Prelicensing education may be offered either in a classroom, online, or by any other means approved by the Nationwide Multistate Licensing System and Registry.

(e) The prelicensing education requirements approved by the Nationwide Multistate Licensing System and Registry in subdivisions (a)(1), (2), and (3) of this section for any state shall be accepted as credit toward completion of prelicensing education requirements in Vermont.

(f) A person previously licensed as a mortgage loan originator under this chapter applying to be licensed again must prove that he or she has completed all of the continuing education requirements for the year in which the license was last held. This subsection does not apply to an individual who is required to retake 20 hours of prelicensing education pursuant to subsection (g) of this section.

(g) A person who has completed 20 hours of prelicensing education under 12 U.S.C. § 5104(c) must retake such prelicensing education to be eligible to apply for a Vermont loan originator license if he or she:

(1) within three years of completing the prelicensing education, does not acquire a valid mortgage loan originator license in any state or does not become a federally registered mortgage loan originator; or

(2) within three years of completing the prelicensing education, obtains a valid mortgage loan originator license in any state or becomes a federally registered mortgage loan originator and subsequently does not maintain an approved mortgage loan originator license in any state or an approved federal registration for a period of three years or more.

(h) A person who has completed two hours of Vermont prelicense education as required by subdivision (a)(4) of this section must retake such prelicensing education to be eligible to apply for a Vermont mortgage loan originator license if he or she:

(1) does not acquire a valid Vermont mortgage loan originator license within three years of completing the prelicense education; or

(2) obtains a valid Vermont mortgage loan originator license and then subsequently does not maintain an approved Vermont mortgage loan originator license for a period of three years or more.
8 V.S.A. § 4208 — VT Code / Title 8 / Chapter 113 / Section 4208
§ 4208. Construction of illegal policies
Status: in_force

A policy issued in violation of the provisions of this chapter shall be held valid but shall be construed as provided in the provisions of this chapter. When a provision in a policy is in conflict with the provisions of this chapter, the rights, duties, and obligations of the insurer, the policyholder, and the beneficiary shall be governed by the provisions of this chapter.