8 V.S.A. § 3366 — VT Code / Title 8 / Chapter 101 / Section 3366
§ 3366. Assets of companies
Status: in_force

(a)(1) A foreign or alien insurer authorized to do business in this State shall possess and thereafter maintain unimpaired paid-in capital or basic surplus of not less than $2,000,000.00 and, when first so authorized, shall possess and maintain free surplus of not less than $3,000,000.00.

(2) The capital and surplus shall be in the form of cash or marketable securities, a portion of which may be held on deposit with the State Treasurer, such securities as designated by the insurer and approved by the Commissioner, in an amount and subject to conditions determined by the Commissioner. The conditions shall include a requirement that any interest or other earnings attributable to such cash or marketable securities shall inure to the benefit of the insurer until such time as the Commissioner determines that the deposit must be used for the benefit of the policyholders of the insurer or some other authorized public purpose relating to the regulation of the insurer.

(3) The Commissioner may prescribe additional capital or surplus for all insurers authorized to transact the business of insurance based upon the type, volume, and nature of insurance business transacted. The Commissioner may reduce or waive the capital and surplus amounts required by this section pursuant to a plan of dissolution for the company approved by the Commissioner.

(b) The express purpose of subsection (a) of this section and the Commissioner's power to require the deposit of cash or marketable securities set forth therein is to protect the interests of Vermont policyholders in the event of the insolvency of the insurer. Except to the extent it would contravene applicable provisions of 9A V.S.A. Article 9, the State of Vermont shall be deemed to control the funds on deposit and to have a lien on the funds for the benefit of the Vermont policyholders affected by the insolvency. The lien so created shall be superior to any lien filed by a general creditor of the insurer.
8 V.S.A. § 2764 — VT Code / Title 8 / Chapter 83 / Section 2764
§ 2764. Private right of action and Consumer Protection Act
Status: in_force

(a) A consumer may bring a private action against a licensee or any person that should have been licensed under this chapter for restitution because of a violation of this chapter.

(b) The powers vested in the Commissioner by this chapter shall be in addition to any other powers or rights of consumers or the Attorney General or others under any other applicable law or rule, including without limitation the Vermont Consumer Protection Act and any applicable rules issued in connection therewith, provided that the Commissioner's determinations concerning the interpretation and administration of the provisions of this chapter and any rules adopted thereunder shall carry a presumption of validity.
8 V.S.A. § 3552 — VT Code / Title 8 / Chapter 101 / Section 3552
§ 3552. Fees assessed by the National Association of Insurance Commissioners
Status: in_force

A company domiciled in this State and licensed by the Commissioner of Financial Regulation under this title, including captive insurance companies and risk retention groups licensed under chapter 141 of this title shall not be required to pay any fee, assessment, or charge of any kind to the National Association of Insurance Commissioners, including annual statement filing fees, securities valuation fees, and any other such fees, assessments, and charges determined by the Commissioner to be necessary for such companies to do business, unless such fees, assessments, or charges have been established and authorized in rules adopted by the Commissioner.
8 V.S.A. § 4727 — VT Code / Title 8 / Chapter 129 / Section 4727
§ 4727. Personal insurance; use of credit information
Status: in_force

(a) Purpose. The purpose of this section is to regulate the use of credit information for personal insurance so that consumers are afforded certain protections with respect to the use of such information.

(b) Scope. This section applies to personal insurance and not to commercial insurance. As used in this section, “personal insurance” means private passenger automobile, homeowners, motorcycle, mobile home owners, and noncommercial dwelling fire insurance policies. Such policies must be underwritten for personal, family, or household use. No other types of insurance shall be included as personal insurance for the purpose of this section.

(c) Definitions. As used in this section:

(1) “Adverse action” means a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of personal insurance.

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

(3) “Applicant” means an individual who has applied to be covered by a personal insurance policy with an insurer.

(4) “Consumer” means an insured whose credit information is used or whose insurance score is calculated in the underwriting or rating of a personal insurance policy or an applicant for such a policy.

(5) “Consumer reporting agency” means any person who, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.

(6) “Credit information” means any credit related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance. Information that is not credit related shall not be considered “credit information,” regardless of whether it is contained in a credit report or in an application or is used to calculate an insurance score.

(7) “Credit report” means any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, or credit capacity that is used or expected to be used or collected in whole or in part for the purpose of serving as a factor to determine personal insurance premiums, eligibility for coverage, or tier placement.

(8) “Insurance score” means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit information for the purposes of predicting the future insurance loss exposure of an individual applicant or insured.

(d) Use of credit information. An insurer authorized to do business in this State that uses credit information to underwrite or rate risks shall not:

(1) Use an insurance score that is calculated using income, gender, address, zip code, ethnic group, religion, marital status, or nationality of the consumer as a factor.

(2) Deny, cancel, or nonrenew a policy of personal insurance solely on the basis of credit information without consideration of any other applicable underwriting factor independent of credit information and not expressly prohibited by subdivision (1) of this subsection.

(3) Base an insured's renewal rates for personal insurance solely upon credit information without consideration of any other applicable factor independent of credit information.

(4) Take an adverse action against a consumer solely because he or she does not have a credit card account without consideration of any other applicable factor independent of credit information.

(5) Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance unless the insurer does one of the following:

(A) treats the consumer as otherwise approved by the Commissioner if the insurer presents information that such an absence or inability relates to the risk for the insurer;

(B) treats the consumer as if the applicant or insured had neutral credit information, as defined by the insurer; or

(C) excludes the use of credit information as a factor and uses only other underwriting criteria.

(6) Take an adverse action against a consumer based on credit information unless an insurer obtains and uses a credit report issued or an insurance score calculated within 90 days from the date the policy is first written or renewal is issued.

(7) Use credit information unless not later than every 36 months following the last time that the insurer obtained current credit information for the insured, the insurer recalculates the insurance score or obtains an updated credit report. Regardless of the requirements of this subsection:

(A) At annual renewal, upon the request of a consumer or the consumer's agent, the insurer shall reunderwrite and rerate the policy based upon a current credit report or insurance score. An insurer need not recalculate the insurance score or obtain the updated credit report of a consumer more frequently than once in a 12-month period.

(B) The insurer shall have the discretion to obtain current credit information upon any renewal before the 36 months if consistent with its underwriting guidelines.

(C) No insurer need obtain current credit information for an insured, despite the requirements of subdivision (A) of this subdivision (7), if one of the following applies:

(i) The insurer is treating the consumer as otherwise approved by the Commissioner.

(ii) The insured is in the most favorably priced tier of the insurer within a group of affiliated insurers. However, the insurer shall have the discretion to order such report if consistent with its underwriting guidelines.

(iii) Credit was not used for underwriting or rating such insured when the policy was initially written. However, the insurer shall have the discretion to use credit for underwriting or rating such insured upon renewal if consistent with its underwriting guidelines.

(iv) The insurer reevaluates the insured beginning not later than 36 months after inception and thereafter based upon other underwriting or rating factors, excluding credit information.

(8) Use the following as a negative factor in any insurance scoring methodology or in reviewing credit information for the purpose of underwriting or rating a policy of personal insurance:

(A) credit inquiries not initiated by the consumer or inquiries requested by the consumer for his or her own credit information;

(B) inquiries relating to insurance coverage, if so identified on a consumer's credit report;

(C) collection accounts with a medical industry code, if so identified on the consumer's credit report;

(D) multiple lender inquiries if coded by the consumer reporting agency on the consumer's credit report as being from the home mortgage industry and made within 30 days of one another unless only one inquiry is considered; and

(E) multiple lender inquiries if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry and made within 30 days of one another unless only one inquiry is considered.

(e) Extraordinary life circumstances.

(1) Notwithstanding any other law or rule to the contrary, an insurer that uses credit information shall, on written request from an applicant for insurance coverage or an insured, provide reasonable exceptions to the insurer's rates, rating classifications, company or tier placement, or underwriting rules or guidelines for a consumer who has experienced and whose credit information has been directly influenced by any of the following events:

(A) a catastrophic event, as declared by the federal or State government;

(B) a serious illness or injury or a serious illness or injury to an immediate family member;

(C) the death of a spouse, child, or parent;

(D) divorce or involuntary interruption of legally owed alimony or support payments;

(E) identity theft;

(F) the temporary loss of employment for a period of three months or more if it results from involuntary termination;

(G) military deployment overseas; or

(H) other events as determined by the insurer.

(2) If an applicant or insured submits a request for an exception as set forth in subdivision (1) of this subsection, an insurer may, in its sole discretion, but is not mandated to:

(A) require the consumer to provide reasonable written and independently verifiable documentation of the event;

(B) require the consumer to demonstrate that the event had direct and meaningful impact on the consumer's credit information;

(C) require such request be made not more than 60 days from the date of the application for insurance or the policy renewal;

(D) grant an exception despite the consumer not providing the initial request for an exception in writing; or

(E) grant an exception where the consumer asks for consideration of repeated events or the insurer has considered this event previously.

(3) An insurer is not out of compliance with any law or rule relating to underwriting, rating, or rate filing as a result of granting an exception under this section. Nothing in this section shall be construed to provide a consumer or other insured with a cause of action that does not exist in the absence of this section.

(4) The insurer shall provide notice to consumers that reasonable exceptions are available and information about how the consumer may inquire further.

(5) Within 30 days following the insurer's receipt of sufficient documentation of an event described in subdivision (1) of this subsection, the insurer shall inform the consumer of the outcome of the request for a reasonable exception. Such communication shall be in writing or provided to an applicant in the same medium as the request.

(f) Dispute resolution and error correction. If it is determined through the dispute resolution process set forth in the federal Fair Credit Reporting Act, 15 U.S.C. § 1681i(a)(5), that the credit information of a current insured was incorrect or incomplete and if the insurer receives notice of such determination from either the consumer reporting agency or from the insured, the insurer shall reunderwrite and rerate the consumer within 30 days following receiving the notice. After reunderwriting or rerating the insured, the insurer shall make any adjustments necessary, consistent with its underwriting and rating guidelines. If an insurer determines that the insured has overpaid the premium, the insurer shall refund to the insured the amount of overpayment calculated back to the shorter of either the last 12 months of coverage or the actual policy period.

(g) Initial notification.

(1) If an insurer writing personal insurance uses credit information in underwriting or rating a consumer, the insurer or its agent shall disclose, either on the insurance application or at the time the insurance application is taken, that it may obtain credit information in connection with such application. Such disclosure shall be either written or provided to an applicant in the same medium as the application for insurance. The insurer need not provide the disclosure statement required under this section to any insured on a renewal policy if such consumer has previously been provided a disclosure statement.

(2) Use of the following example disclosure statement constitutes compliance with this section: “In connection with this application for insurance, we may review your credit report or obtain or use a credit-based insurance score based on the information contained in that credit report. We may use a third party in connection with the development of your insurance score.”

(h) Adverse action notification. If an insurer takes an adverse action based upon credit information, the insurer must meet the notice requirements of this subsection. Such insurer shall:

(1) Provide notification to the consumer that an adverse action has been taken, in accordance with the requirements of the federal Fair Credit Reporting Act, 15 U.S.C. § 1681m(a).

(2) Provide notification to the consumer explaining the reason for the adverse action. The reasons must be provided in sufficiently clear and specific language so that a person can identify the basis for the insurer's decision to take an adverse action. Such notification shall include a description of up to four factors that were the primary influences of the adverse action. The use of generalized terms such as “poor credit history,” “poor credit rating,” or “poor insurance score” does not meet the explanation requirements of this subsection. Standardized credit explanations provided by consumer reporting agencies or other third-party vendors are deemed to comply with this section.

(i) Plain language. In any written communication or notification to a consumer pursuant to this section, an insurer shall use clear and plain language that is understandable to the average consumer.

(j) Filing. Insurers that use insurance scores to underwrite and rate risks must file their scoring models, or other scoring processes, with the Department of Financial Regulation. A third party may file scoring models on behalf of insurers. A filing that includes insurance scoring may include loss experience justifying the use of credit information. Any filing relating to credit information is considered a trade secret and is not subject to disclosure under Vermont's Public Records Act.

(k) Indemnification. An insurer shall indemnify, defend, and hold agents harmless from and against all liability, fees, and costs arising out of or relating to the actions, errors, or omissions of a producer who obtains or uses credit information or insurance scores, or both, for an insurer, provided the producer follows the instructions of or procedures established by the insurer and complies with any applicable law or rule. Nothing in this section shall be construed to provide a consumer or other insured with a cause of action that does not exist in the absence of this section.

(l) Sale of policy term information by consumer reporting agency. A consumer reporting agency shall not provide or sell data or lists that include any information that in whole or in part was submitted in conjunction with an insurance inquiry about a consumer's credit information or a request for a credit report or insurance score. Such information includes the expiration dates of an insurance policy or any other information that may identify time periods during which a consumer's insurance may expire and the terms and conditions of the consumer's insurance coverage. The restrictions provided in this subsection do not apply to data or lists the consumer reporting agency supplies to the insurance producer from whom information was received, the insurer on whose behalf such producer acted, or such insurer's affiliates or holding companies. Nothing in this section shall be construed to restrict any insurer from being able to obtain a claims history report or a motor vehicle report.
8 V.S.A. § 3423 — VT Code / Title 8 / Chapter 101 / Section 3423
§ 3423. Converting mutual insurer or mutual insurance holding company
Status: in_force

(a) A mutual insurer may become a stock insurer or a mutual insurance holding company may become a stock company or reorganize under such reasonable plan and procedure as may be approved by the Commissioner after a hearing thereon of which notice was given to the eligible members, all of whom shall have the right to appear at the hearing.

(b) The Commissioner shall not approve any such plan or procedure unless:

(1) Its terms and conditions are fair and equitable.

(2) The plan shall have been duly adopted by action of not less than three-fourths of the members of the board of directors or trustees of the mutual insurer or mutual insurance holding company, as the case may be.

(3) It is subject to approval by vote of not less than three-fourths of the eligible members actually voting thereon in person, by proxy, or by mail at a meeting of members called for the purpose, for which at least 30 days' notice has been provided to eligible members, pursuant to such reasonable notice and procedure as may be approved by the Commissioner.

(4) The plan provides the method by which the aggregate value of eligible members' interests will be determined. The method specified must be acceptable to the Commissioner and shall be based on the market value of the converted company, unless another method for determining this value is approved by the Commissioner.

(5) The plan provides for each eligible member to receive a fixed component of consideration or a variable component of consideration, or both, or any other component of consideration acceptable to the Commissioner. Any component shall reflect, based upon fair and equitable formulas, methods and assumptions, factors such as estimated proportionate contributions of classes, or groupings of policies and contracts to the aggregate component of consideration being distributed to eligible members, or other factors the Commissioner may approve.

(6) The plan specifies the consideration to the eligible members entitled thereto, which consideration may consist of cash, securities of the reorganized insurer or securities of another institution or institutions, subscription rights to purchase securities of the reorganized insurer or securities of another institution or institutions, a certificate of contribution, surplus notes, additional insurance or annuity benefits, policy credits, increased dividends, or other consideration, or any combination of such forms of consideration as the Commissioner may approve. The form or forms of consideration to be distributed to any class or category of member need not be the same as the consideration to be distributed to any other class or category of member. The choice of the form or forms of consideration to be distributed may take into account such factors as the class or category of policy with respect to what consideration is being distributed, the country of residence or tax status of eligible members, the reasonableness of the cost of providing a particular form of consideration in relation to its value, or other appropriate factors. If the plan provides for the sale of securities to members, the securities shall be offered to members at a price not greater than that to be offered under the plan to others.

(7) If the plan relates to the conversion of a mutual life insurer, the plan shall provide for the reasonable expectations of policyholders through the establishment of a closed block or other method acceptable to the Commissioner. Any provision for dividend expectations may be limited to participating individual life insurance policies and participating individual annuity contracts in force or deemed to be in force by the plan of conversion on the effective date of the plan for which the insurer has an experience-based dividend scale due, paid or accrued by action of the board of directors of the mutual insurer in the year in which the plan is adopted; provided, however, that other categories of policies and benefits may be included or excluded, subject to approval of the Commissioner.

(8) If the plan relates to the conversion of a mutual insurer, the plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital stock required of a domestic stock insurer upon initial authorization to transact like kinds of insurance, together with an amount of surplus that is no less than the amount that the Commissioner deems to be reasonably necessary for the insurer's future solvency.

(9) If the plan relates to the conversion or reorganization of a mutual insurance holding company, the plan shall provide for:

(A) the conversion of the mutual insurance holding company to a stock company followed by a merger or consolidation of the converted stock company with another stock company, which may include a subsidiary of the mutual insurance holding company;

(B) a sale of an intermediate stock holding company or stock insurer with shares or other consideration being distributed to members of the mutual insurance holding company, followed by the liquidation or dissolution of the mutual insurance holding company;

(C) a liquidation or dissolution of the mutual insurance holding company; or

(D) any combination of the foregoing or other reorganization or transfer of assets and assumption of liabilities approved by the Commissioner.

(10) The Commissioner finds that the insurer's management has not, through reduction in volume of new business written, or cancellation or through any other means sought to reduce, limit, or affect the number or identity of the insurer's members to be entitled to participate in such plan, in order to secure for the individuals comprising management any unfair financial advantage through such plan, or intentionally engaged in any other conduct designed to secure for the individuals comprising management any unfair financial advantage through such plan.

(c) Subsection (b) of this section shall not be deemed to prohibit the inclusion in the demutualization plan of provisions under which the individuals comprising the insurer's management or mutual insurance holding company's management, as the case may be, and employee group may receive employee benefit and compensation arrangements, including arrangements through the use of stock of the reorganized insurer or stock of its parent corporation or other entity, that are to become effective simultaneously with the plan of reorganization or, subsequently, provided such provisions are approved by the Commissioner. If the plan provides for the distribution or sale to members of capital stock of the converted company, nothing in subsection (b) of this section shall be deemed to prohibit the inclusion in the plan of provisions under which the converting company's directors, officers, agents, or employees shall be entitled to purchase for cash at the same price as offered to the insurer's members, shares of stock not taken by members in accordance with such terms and reasonable classifications of such individuals as may be included in the plan and approved by the Commissioner.

(d) No director, officer, agent, or employee of the insurer, the mutual insurance holding company, or any other person shall receive any fee, commission, or other valuable consideration whatsoever, other than their usual regular salaries and compensation, for in any manner aiding, promoting, or assisting in such conversion except as set forth in the plan approved by the Commissioner. This provision shall not be deemed to prohibit the payment of reasonable fees and compensation to attorneys at law, accountants, and actuaries for services performed in the independent practice of their professions, even though also directors of the insurer.

(e) Upon the effective date of the plan, the rights of members in the mutual insurer or mutual insurance holding company shall be extinguished. All policies of a mutual insurer in force on the effective date of the plan shall remain in force under the terms of those policies, except for any terms affected by the extinguishment of those membership rights.

(f) If a plan provides for the distribution of common stock, but does not provide for registration and public trading of the common stock of the converted insurer or the parent corporation or the converted mutual insurance holding company or other entity as of the effective date of the plan, the plan shall require the appropriate entity or entities to use good faith efforts to encourage and assist in the establishment of a market for such stock as soon as reasonably possible and, in any event, not later than two years after the effective date of the reorganization unless otherwise approved by the Commissioner. Within two years after the effective date of the reorganization unless otherwise approved by the Commissioner, the converted insurer or the parent corporation or the converted mutual insurance holding company or other entity shall make available to each eligible policyholder or member who received and retained shares of common stock with minimal aggregate value upon reorganization, a procedure to dispose of shares of stock at market value without brokerage commissions or similar fees under a plan approved by the Commissioner.

(g) At the option of the mutual insurer or mutual insurance holding company, as the case may be, any common shares or other securities of the converted stock company or of any other institution, included in the members' consideration, other than those acquired as a result of a member exercising any subscription rights, may be placed in a trust or other entity existing for the exclusive benefit of the members, and established solely for the purpose of effectuating the reorganization to which such common shares or other securities are issued by the issuer on the effective date of the reorganization, such consideration to be distributed to members during a process specified in the plan and approved by the Commissioner.

(h) Except as otherwise specifically provided in the plan of conversion, prior to and for a period of five years following the effective date of such plan, no person other than the converted stock insurer or an institution controlling the converted stock insurer or a converted mutual insurance holding company or institutions controlling the converted mutual insurance holding company shall, directly or indirectly, offer to acquire or acquire in any manner the beneficial ownership of five percent or more of any class of a voting security of the new stock insurer or of an institution that owns a majority or all of the voting securities of the new stock insurer or converted mutual insurance holding company, without the prior approval of the Commissioner, of an application for acquisition filed by such person with the Commissioner. The Commissioner shall not approve an application for acquisition unless the Commissioner finds, after a public hearing, that the acquisition would not frustrate the plan of conversion as approved by the policyholders or members and the Commissioner, would be consistent with the purposes of this statute, and would be on terms and conditions that are fair and equitable to the policyholders or members, as the case may be. No security that is acquired or is to be acquired in contravention of this section or of any rule, regulation, or order of the Commissioner may be voted at any shareholders meeting. If the new stock insurer or converted mutual insurance holding company or any institution that owns a majority or all of the voting securities of the new stock insurer or converted mutual insurance holding company or the Commissioner believes that any voting securities have been or are about to be acquired in contravention of this section or of any rule, regulation, or order of the Commissioner, he or she may apply to any court of competent jurisdiction in the State of Vermont for an order to enjoin any offer or acquisition made or any voting of any security so acquired, or to void the vote of any such security in contravention of this section or any rule, regulation, or order of the Commissioner, and for such other equitable relief as may be appropriate.

(i) A failure by a mutual insurer or a mutual insurance company to provide a member or members with the notice required by this section shall not impair the validity of any action taken under this section, if such mutual insurer or mutual insurance holding company has complied substantially and in good faith with all notice requirements, as determined by the Commissioner.

(j) Documents submitted to the Commissioner by the mutual insurer or mutual insurance holding company in connection with obtaining approval of the plan of conversion shall be public documents, except that financial data, actuarial memoranda, and any other information that the Commissioner determines could result in harm to the mutual entity or the converted entity or to its members if disclosed, shall be considered confidential. This confidentiality shall not extend to information provided by the mutual entity that the Commissioner deems necessary to be provided to members to evaluate the plan of conversion.

(k) Any aggrieved party to a plan, within the meaning of section 77 of this title, may appeal an order of the Commissioner, pursuant to the provisions of such section, within 30 days after the issuance of an order of the Commissioner approving or disapproving such plan. Any review by the court shall be confined to the record before the Commissioner.

(l) As used in this section:

(1) “Eligible member” means, in the case of a mutual insurer, a person who owns or, pursuant to the terms of the plan, is deemed to own a policy that was in force as of the record date or, in the case of a mutual insurance holding company, a person who was or, pursuant to the terms of the plan, is deemed to have been a member as of the record date. For this purpose, the record date is the date when the mutual company's board of directors first adopts the plan of conversion, unless another date is specified in the plan of conversion and approved by the Commissioner. In the case of a mutual life insurance company or a mutual insurance holding company, the membership of which is derived from the purchase of contracts from a life insurance company, eligibility may be limited to members holding contracts that have been in force not less than one year.

(2) “Fair and equitable” means that any action undertaken, pursuant to this section, with respect to a plan of conversion, provides for full and proper consideration of the aggregate membership interests and corresponding values of eligible members, in no manner discriminates improperly among eligible members, and appropriately protects the interests of eligible members before and subsequent to the conversion.
8 V.S.A. § 30701 — VT Code / Title 8 / Chapter 220 / Section 30701
§ 30701. Enforcement powers of Commissioner
Status: in_force

(a) The Commissioner may:

(1) Restrict the withdrawal of share or deposit accounts from a Vermont credit union or a Vermont office of a state-chartered credit union when the Commissioner finds that extraordinary circumstances make the restriction necessary for the proper protection of members in the affected credit union.

(2) Order any person to cease violating this title, a lawful regulation, or order of the Commissioner issued under it, or to cease engaging in any unsafe or unsound practice.

(3) Except as provided in subdivision (4) of this subsection, impose an administrative penalty of not more than $15,000.00 upon any credit union or any person who, for each violation of this title, a lawful regulation, or order of the Commissioner issued under it:

(A) knowingly violates this title or a lawful regulation or order issued under it;

(B) has knowingly engaged or participated in any materially unsafe or unsound practice in connection with a credit union; or

(C) has knowingly committed or engaged in any act, omission, or practice that constitutes a breach of fiduciary duty to the credit union, including violations of section 31313 of this title.

(4) Impose an administrative penalty of not more than $100.00 per day on any person who fails without good cause to file any report or other filing under this title when due.

(5) Remove from a Vermont credit union or state credit union regulated under this title any director, officer, committee member, employee, agent of the credit union, or other person who:

(A) knowingly violates this title or a lawful regulation or order issued under it;

(B) is convicted of a crime involving dishonesty;

(C) has knowingly engaged or participated in any materially unsafe or unsound practice in connection with the credit union;

(D) has knowingly committed or engaged in any act, omission, or practice that constitutes a breach of fiduciary duty to the credit union; or

(E) is not eligible for bond coverage or who loses his or her ability to be covered by a bond.

(b) In determining the amount of any administrative penalty assessed pursuant to this section, the Commissioner shall consider the following factors:

(1) the appropriateness of the administrative penalty with respect to the financial resources and good faith of the person or credit union charged;

(2) the gravity of the violation or practice;

(3) the history of previous violations or practices of a similar nature;

(4) the economic benefit, if any, derived by any person from the violation or practice;

(5) whether the credit union has suffered or probably will suffer financial loss or other damage;

(6) whether the interest of members could be seriously prejudiced by such violation, practice, or breach of fiduciary duty; or

(7) other factors as justice may require.

(c)(1) Except as provided in subdivision (2) of this subsection, the Commissioner shall provide notice of any enforcement order proposed pursuant to this section and the grounds therefore by mail to the credit union and to any person named as a party to the enforcement proceeding. The credit union or any person so served may, within 30 days after service on the credit union, request that the Commissioner hold a hearing. If no hearing is requested, the proposed order shall become final 30 days after service on the credit union or such person. The provisions of 3 V.S.A. chapter 25 and any applicable Department rules shall govern any hearing held by the Commissioner under this section. An appeal under this section shall be filed within 30 days after the date of the Commissioner's decision and shall be to the Washington Superior Court.

(2) Notwithstanding subdivision (1) of this subsection, the Commissioner may, ex parte without notice, issue any enforcement order under this section in any case in which the Commissioner determines such action is necessary to:

(A) conserve the assets of any credit union; or

(B) protect the interests of the members of such credit union.

(d) The hearing on a removal order shall be private unless the Commissioner determines that a public hearing is necessary to protect the public interest. If the Commissioner deems it necessary to ensure the continued safety and soundness of the credit union, the Commissioner may, in his or her discretion, order an immediate suspension of any person pending completion of further administrative proceedings on his or her removal.
8 V.S.A. § 3461 — VT Code / Title 8 / Chapter 101 / Section 3461
§ 3461. Definitions
Status: in_force

As used in this chapter:

(1) “Admitted assets” means assets permitted to be reported as admitted assets on the annual statutory financial statement of the insurer for the next preceding year or as shown by a current financial statement.

(2) “Appraised” or “appraised value” when used in connection with real estate shall refer to appraisals made or examined and approved by an insurer or its agents. An insurer shall have the right to make one or more renewals or extensions of a loan secured by real estate, provided any renewal or extension is based upon a reexamination of the facts and upon an appraisal made within three years.

(3) “Asset-backed security” means a security or other instrument, excluding a mutual fund, evidencing an interest in, or the right to receive payments from, or payable from distributions on, an admitted asset, a pool of admitted assets, or specifically divisible cash flows that are legally transferred to a trust or another special purpose bankruptcy-remote business entity, on the following conditions:

(A) The trust or other business entity is established solely for the purpose of acquiring specific types of admitted assets or rights to cash flows, issuing securities and other instruments representing an interest in or right to receive cash flows from those admitted assets or rights, and engaging in activities required to service the admitted assets or rights and any credit enhancement or support features held by the trust or other business entity.

(B) The admitted assets of the trust or other business entity consist solely of interest-bearing obligations or other contractual obligations representing the right to receive payment from the cash flows from the admitted assets or rights. However, the existence of credit enhancements, such as letters of credit or guarantees, or support features such as swap agreements, shall not cause a security or other instrument to be ineligible as an asset-backed security.

(4) “Canada” means Canada, any province of Canada, or any political subdivision of Canada.

(5) “Cap” means an agreement obligating the seller to make payments to the buyer, with each payment based on the amount by which a reference price or level or the performance or value of one or more underlying interests exceeds a predetermined number, sometimes called the strike rate or strike price.

(6) “Collar” means an agreement to receive payments as the buyer of an option, cap, or floor and to make payments as the seller of a different option, cap, or floor.

(7) “Counterparty exposure amount” means:

(A) The net amount of credit risk attributable to a derivative instrument entered into with a business entity other than through a qualified exchange or qualified foreign exchange or cleared through a qualified clearinghouse. Such derivative instruments are hereinafter referred to as “over-the-counter derivative instruments.” The amount of credit risk equals:

(i) the market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or

(ii) zero, if the liquidation of the derivative instrument would not result in a final cash payment to the insurer.

(B) If over-the-counter derivative instruments are entered into under a written master agreement that provides for netting of payments owed by the respective parties, and the domiciliary jurisdiction of the counterparty is either within the United States or, if not within the United States, within a foreign jurisdiction listed in the Purposes and Procedures of the NAIC Investment Analysis Office as eligible for netting, the net amount of credit risk shall be the greater of zero or the net sum of:

(i) the market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment to the insurer; and

(ii) the market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment by the insurer to the business entity.

(C) For open transactions, market value shall be determined at the end of the most recent quarter of the insurer's fiscal year and shall be reduced by the market value of acceptable collateral held by the insurer or placed in escrow by one or both parties.

(8) “Covered” means that an insurer owns or can immediately acquire, through the exercise of options, warrants, or conversion rights already owned, the underlying interest in order to fulfill or secure its obligations under a call option, cap, or floor it has written or has set aside under a custodial or escrow agreement cash or cash equivalents with a market value equal to the amount required to fulfill its obligations under a put option it has written, in an income generation transaction.

(9) “Derivative instrument” means an agreement, option, instrument, or a series or combination thereof:

(A) to make or take delivery of, or assume or relinquish, a specified amount of one or more underlying interests or to make a cash settlement in lieu thereof; or

(B) that has a price, performance, value, or cash flow based primarily upon the actual or expected price, level, performance, value, or cash flow of one or more underlying interests. Derivative instruments include options, warrants used in a hedging transaction and not attached to another financial instrument, caps, floors, collars, swaps, forwards, futures, and any other agreements, options, or instruments substantially similar thereto or any series or combination thereof and any agreements, options, or instruments permitted under this chapter. Derivative instruments shall not include an investment authorized under subdivisions 3463(a)(1) through (a)(14) and (a)(16) through (a)(29) of this title.

(10) “Derivative transaction” means a transaction involving the use of one or more derivative instruments.

(11) “Direct” when used in connection with “obligation” means that a designated obligor shall be primarily liable on the instrument representing the obligation.

(12) “Domestic jurisdiction” means the United States, any state of the United States, or any political subdivision of any of the foregoing.

(13) “Equity interest” means any of the following that are not rated credit instruments:

(A) common stock;

(B) preferred stock;

(C) trust certificate;

(D) equity investment in an investment company other than a money market mutual fund or a listed bond mutual fund;

(E) investment in a common trust fund of a bank regulated by a federal or state agency;

(F) an ownership interest in minerals, oil, or gas, the rights to which have been separated from the underlying fee interest in the real estate where the minerals, oil, or gas is located;

(G) instruments that are mandatorily, or at the option of the issuer, convertible to equity;

(H) limited partnership interests;

(I) member interests in limited liability companies;

(J) warrants or other rights to acquire equity interests that are created by the person that owns or would issue the equity to be acquired; or

(K) instruments that would be rated credit instruments except for the provisions of subdivision (39)(B) of this section.

(14) “Floor” means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number, sometimes called the floor rate or price, exceeds a reference price, level, performance, or value of one or more underlying interests.

(15)(A) “Foreign investment” means an investment in a foreign jurisdiction, or an investment in a person, real estate, or asset domiciled in a foreign jurisdiction, that is substantially of the same type as those eligible for investment under this subchapter, other than under subdivision 3463(a)(28) of this title. An investment shall not be deemed to be foreign if the issuing person, qualified primary credit source, or qualified guarantor is a domestic jurisdiction or Canada or a person domiciled in a domestic jurisdiction or Canada, unless:

(i) the issuing person is a shell business entity; and

(ii) the investment is not assumed, accepted, guaranteed, or insured or otherwise backed by a domestic jurisdiction or Canada or a person that is not a shell business entity domiciled in a domestic jurisdiction or Canada.

(B) For purposes of this definition:

(i) “Qualified guarantor” means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction or Canada.

(ii) “Qualified primary credit source” means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction or Canada.

(iii) “Shell business entity” means a business entity having no economic substance except as a vehicle for owning interests in assets issued, owned, or previously owned by a person domiciled in a foreign jurisdiction.

(16) “Foreign jurisdiction” means a jurisdiction other than a domestic jurisdiction or Canada.

(17) “Forward” means an agreement (other than a future) to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance, or value of, one or more underlying interests.

(18) “Future” means an agreement, traded on a qualified exchange or qualified foreign exchange, to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance, or value of, one or more underlying interests.

(19) “Guaranteed” means that the guarantor will perform the obligation of the obligor or will purchase the obligation to the extent of the guaranty.

(20) “Hedging transaction” means a derivative transaction that is entered into and maintained to reduce:

(A) the risk of a change in the value, yield, price, cash flow, or quantity of assets or liabilities that the insurer has acquired or incurred or anticipates acquiring or incurring; or

(B) the currency exchange rate risk or the degree of exposure as to assets or liabilities that an insurer has acquired or incurred or anticipates acquiring or incurring.

(21) “High grade investment” means a rated credit instrument rated 1 or 2 by the SVO or that meets and continues to meet the conditions for exemption as provided in section 3461d of this title.

(22) “Income generation transaction” means a derivative transaction involving the writing of covered call options, covered put options, covered caps, or covered floors that is intended to generate income or enhance return.

(23) “Institution” or “business entity” includes a sole proprietorship, corporation, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy, or other similar form of business organization, whether organized for profit or not for profit.

(24) “Listed bond mutual fund” means a mutual fund that at all times qualifies for inclusion on the “bond fund list” within the Purposes and Procedures of the NAIC Investment Analysis Office or any successor publication.

(25) “Lower grade investment” or “lower grade obligation” means a rated credit instrument rated 4, 5, or 6 by the SVO.

(26) “Medium grade investment” or “medium grade obligation” means a rated credit instrument rated 3 by the SVO.

(27) “Money market mutual fund” means a mutual fund that meets the conditions of 17 C.F.R. Part 270.2a-7, under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), as amended or renumbered.

(28) “Mortgage loan” means an obligation secured by a mortgage, deed of trust, trust deed, or other consensual lien on real estate.

(29) “Mutual fund” means an investment company or, in the case of an investment company that is organized as a series company, an investment company series that, in either case, is registered with the U.S. Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), as amended.

(30) “NAIC” means the National Association of Insurance Commissioners.

(31) “Obligation” means a bond, note, debenture, trust certificate, including an equipment certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, credit tenant plan, loan secured by financing net leases, and other evidence of indebtedness for the payment of money (or participations, certificates, or other evidences of interest in any of the foregoing).

(32) “Option” means an agreement giving the buyer the right to buy or receive (a “call option”), sell or deliver (a “put option”), enter into, extend, or terminate or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests.

(33) “Potential exposure” means the amount determined in accordance with the NAIC Annual Statement Instructions.

(34) “Qualified bank” means:

(A) a national bank, state bank, or trust company that at all times is no less than adequately capitalized as determined by standards adopted by U.S. banking regulators, and that is either regulated by state banking laws or is a member of the Federal Reserve System; or

(B) a bank or trust company incorporated or organized under the laws of a country other than the United States that is regulated as a bank or trust company by that country's government or an agency thereof and that at all times is no less than adequately capitalized as determined by the standards adopted by international banking authorities.

(35) “Qualified clearinghouse” means a clearinghouse for, and subject to the rules of, a qualified exchange or a qualified foreign exchange, which provides clearing services, including acting as a counterparty to each of the parties to a transaction, such that the parties no longer have credit risk as to each other.

(36) “Qualified exchange” means:

(A) a securities exchange registered as a national securities exchange or a securities market regulated under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), as amended;

(B) a board of trade or commodities exchange designated as a contract market by the Commodity Futures Trading Commission or any successor thereof;

(C) Private Offerings, Resales and Trading through Automated Linkages (PORTAL);

(D) a designated offshore securities market as defined in Securities Exchange Commission Regulation S, 17 C.F.R. Part 230, as amended; or

(E) a qualified foreign exchange.

(37) “Qualified foreign exchange” means a foreign exchange, board of trade, or contract market located outside the United States, its territories, or possessions:

(A) that has received regulatory comparability relief under Commodity Futures Trading Commission (CFTC) Rule 30.10 (as set forth in Appendix C to Part 30 of the CFTC's Regulations, 17 C.F.R. Part 30);

(B) that is, or its members are, subject to the jurisdiction of a foreign futures authority that has received regulatory comparability relief under CFTC Rule 30.10 (as set forth in Appendix C to Part 30 of the CFTC's Regulations, 17 C.F.R. Part 30) as to futures transactions in the jurisdiction where the exchange, board of trade, or contract market is located; or

(C) upon which foreign stock index futures contracts are listed that are the subject of no-action relief issued by the CFTC's Office of General Counsel, provided that an exchange, board of trade, or contract market that qualifies as a “qualified foreign exchange” only under this subdivision shall only be a “qualified foreign exchange” as to foreign stock index futures contracts that are the subject of no-action relief.

(38)(A) “Rated credit instrument” means a contractual right to receive cash or another rated credit instrument from another entity, which instrument:

(i) is rated or required to be rated by the SVO or meets and continues to meet the conditions for exemption as provided in section 3461d of this title;

(ii) in the case of an instrument with a maturity of 397 days or less, is issued, guaranteed, or insured by an entity that is rated by, or another obligation of such entity is rated by, the SVO or by a nationally recognized statistical rating organization recognized by the SVO;

(iii) in the case of an instrument with a maturity of 90 days or less, is issued by a qualified bank;

(iv) is a share of a listed bond mutual fund; or

(v) is a share of a money market mutual fund.

(B) “Rated credit instrument” does not mean:

(i) an instrument that is mandatorily or, at the option of the issuer, convertible to an equity interest; or

(ii) a security that has a par value and whose terms provide that the issuer's net obligation to repay all or part of the security's par value is determined by reference to the performance of an equity, a commodity, a foreign currency, or an index of equities, commodities, foreign currencies, or combinations thereof.

(39) “Special rated credit instrument” means a rated credit instrument that is:

(A) An instrument that is structured so that, if it is held until retired by or on behalf of the issuer, its rate of return, based on its purchase cost and any cash flow stream possible under the structure of the transaction, may become negative due to reasons other than the credit risk associated with the issuer of the instrument; however, a rated credit instrument shall not be a special rated credit instrument under this subdivision if it is:

(i) a share in a listed bond mutual fund;

(ii) an instrument, other than an asset-backed security, with payments of par value fixed as to amount and timing, or callable but in any event payable only at par or greater, and interest or dividend cash flows that are based on either a fixed or variable rate determined by reference to a specified rate or index;

(iii) an instrument, other than an asset-backed security, that has a par value, and is purchased at a price no greater than 110 percent of par;

(iv) an instrument, including an asset-backed security, whose rate of return would become negative only as a result of a prepayment due to casualty, condemnation or economic obsolescence of collateral, or change of law;

(v) an asset-backed security that relies on collateral that meets the requirements of subdivision (ii) of this subdivision (39)(A), the par value of which collateral:

(I) is not permitted to be paid sooner than one-half of the remaining term to maturity from the date of acquisition;

(II) is permitted to be paid prior to maturity only at a premium sufficient to provide a yield to maturity for the investment, considering the amount prepaid and reinvestment rates at the time of early repayment, at least equal to the yield to maturity of the initial investment; or

(III) is permitted to be paid prior to maturity at a premium at least equal to the yield of a treasury issue of comparable remaining life; or

(vi) an asset-backed security that relies on cash flows from assets that are not prepayable at any time at par, but is not otherwise governed by subdivision (v) of this subdivision (39)(A), if the asset-backed security has a par value reflecting principal payments to be received if held until retired by or on behalf of the issuer, and is purchased at a price no greater than 105 percent of such par amount.

(B) An asset-backed security that:

(i) Relies on cash flows from assets that are prepayable at par at any time;

(ii) Does not make payments of par that are fixed as to amount and timing; and

(iii) Has a negative rate of return at the time of acquisition if a prepayment threshold assumption is used with such prepayment threshold assumption defined as either:

(I) Two times the prepayment expectation reported by a recognized, publicly available source as being the median of expectations contributed by broker dealers or other entities, except insurers, engaged in the business of selling or evaluating such securities or assets. The prepayment expectation used in this calculation shall be, at the insurer's election, the prepayment expectation for pass-through securities of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, or for other assets of the same type as the assets that underlie the asset-backed security, in either case with a gross weighted average coupon comparable to the gross weighted average coupon of the assets that underlie the asset-backed security; or

(II) Another prepayment threshold assumption specified by the Commissioner by rule.

(C) For purposes of subdivision (B) of this subdivision (39), if the asset-backed security is purchased in combination with one or more other asset-backed securities that are supported by identical underlying collateral, the insurer may calculate the rate of return for these specific combined asset-backed securities in combination. The insurer must maintain documentation demonstrating that such securities were acquired and are continuing to be held in combination.

(40) “State of the United States” means any state of the United States of America, the District of Columbia, and the Commonwealth of Puerto Rico.

(41) “SVO” means the Securities Valuation Office of the NAIC or any successor office established by the NAIC.

(42) “Swap” means an agreement to exchange or to net payments at one or more times based on the actual or expected price, level, performance, or value of one or more underlying interests.

(43) “Underlying interest” means the assets, liabilities, other interests, or a combination thereof underlying a derivative instrument, such as any one or more securities, currencies, rates, indices, commodities, or derivative instruments.

(44) “Warrant” means an instrument that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times outlined in the warrant agreement. Warrants may be issued alone or in connection with the sale of other securities, for example, as part of a merger or recapitalization agreement or to facilitate divestiture of the securities of another business entity.
8 V.S.A. § 14203 — VT Code / Title 8 / Chapter 204 / Section 14203
§ 14203. Trust deposits; payment on death of trustee
Status: in_force

When a deposit is made in a financial institution by one or more persons in trust for another, the name and residence of the person for whom the deposit is made shall be disclosed, and the deposit shall be credited to the depositor or depositors as trustee for such person. When other notice of the existence and terms of a legal trust is not given in writing to the financial institution, at the death of the trustee, or if there is more than one trustee, at the death of the surviving trustee, the deposit or any part thereof, with the interest thereon, may be paid to the person for whom the deposit was made or to his or her estate.
8 V.S.A. § 19404 — VT Code / Title 8 / Chapter 209 / Section 19404
§ 19404. Deposits of public money
Status: in_force

If, in any financial institution referred to in section 19401 of this title, there are deposits of public money belonging to the State or any political subdivision of the State, the State Treasurer, if the deposit belongs to the State, and the Treasurer of any political subdivision, by and with the consent of the governing body of the political subdivision to which any such deposit may belong, may join with other depositors of the financial institution in a plan for the reopening or reorganizing of the institution or the establishment of a new financial institution, or the restricting of the withdrawal of deposits and for that purpose may bind the State or political subdivision, after being authorized, to limit withdrawals from that deposit over a period of time and in accordance with the plan as may have been agreed to by the other depositors of the financial institution joining in the plan.
8 V.S.A. § 7119 — VT Code / Title 8 / Chapter 147 / Section 7119
§ 7119. Assuming company; Board; principal place of business; registered agent
Status: in_force

No assuming company shall be a party to a legacy insurance transfer under this chapter unless:

(1) its board of directors or committee of managers holds at least one meeting each year in this State;

(2) it maintains its principal place of business in this State; and

(3) it appoints a registered agent to accept service of process and to otherwise act on its behalf in this State, provided that whenever such registered agent cannot with reasonable diligence be found at the registered office of the assuming company, the Secretary of State shall be an agent of such assuming company upon whom any process, notice, or demand may be served.
8 V.S.A. § 3880 — VT Code / Title 8 / Chapter 105 / Section 3880
§ 3880. Notice of cancellation
Status: in_force

(a) No notice of cancellation of a fire, casualty, marine, or multi-peril policy of insurance, unless otherwise provided and controlled by chapter 113, subchapter 2 of this title, shall be effective unless mailed or delivered by the insurer to the named insured at least 45 days prior to the effective date of cancellation; provided, however, that where cancellation is for nonpayment of premium or substantial increase in hazard at least 15 days' notice of cancellation shall be given. In all instances, the reason or reasons for cancellation shall accompany or be included in the notice of cancellation. An insurer shall not be held liable in any claim or suit for damages arising solely from the insurer's compliance with the requirement that the reason for cancellation be specified. This section shall not apply to workers' compensation policies.

(b) The Commissioner shall have the authority to waive any provision of subsection (a) of this section upon the written request of an insurer specifying the reasons therefor.

(c) This section shall not apply to nonrenewal.
8 V.S.A. § 4824 — VT Code / Title 8 / Chapter 131 / Section 4824
§ 4824. Other requirements of controlling producers
Status: in_force

(a) All provisions of chapter 101, subchapter 13 of this title, to the extent they are not in conflict with the provisions of this subchapter, shall continue to apply to all parties within holding company systems subject to this subchapter.

(b)(1) The controlled insurer shall provide the controlling producer with its underwriting standards, rules, and procedures, manuals setting forth the rates to be charged, and the conditions for the acceptance or rejection of risks. The controlling producer shall adhere to the standards, rules, procedures, rates, and conditions. The standards, rules, procedures, rates and conditions shall be the same as those applicable to comparable business placed with the controlled insurer by a producer other than the controlling producer.

(2) The rates of the commissions, charges, and other fees shall be no greater than those applicable to comparable business placed with the controlled insurer by producers other than controlling producers. For purposes of this subdivision and subdivision (1) of this subsection, examples of “comparable business” include the same lines of insurance, same kinds of insurance, same kinds of risks, similar policy limits, and similar quality of business.

(3) If the contract provides that the controlling producer, on insurance business placed with the insurer, is to be compensated contingent upon the insurer's profits on that business, then such compensation shall not be determined and paid until at least five years after the premiums on liability insurance are earned and at least one year after the premiums are earned on any other insurance. In no event shall the commissions be paid until the adequacy of the controlled insurer's reserves on remaining claims has been independently verified pursuant to subdivision (6) of this subsection.

(4) A controlled insurer shall limit the controlling producer's writings in relation to the controlled insurer's surplus and total writings. The insurer may establish a different limit for each line or sub-line of business. The controlled insurer shall notify the controlling producer when the applicable limit is approached and shall not accept business from the controlling producer if the limit is reached. The controlling producer shall not place business with the controlled insurer if it has been notified by the controlled insurer that the limit has been reached.

(5) A controlled insurer shall have an audit committee of the board of directors composed of independent directors. The audit committee shall annually meet with management, the insurer's independent certified public accountants, and an independent casualty actuary or other independent loss reserve specialist acceptable to the Commissioner to review the adequacy of the insurer's loss reserves.

(6) In addition to any other required loss reserve certification, a controlled insurer shall annually, on April 1 of each year, file with the Commissioner an opinion of an independent casualty actuary, or such other independent loss reserve specialist acceptable to the Commissioner, reporting loss ratios for each line of business written and attesting to the adequacy of loss reserves established for losses incurred and outstanding as of year-end, including incurred but not reported, on business placed by the producer.

(7) A controlled insurer shall annually report to the Commissioner the amount of commissions paid to the producer, the percentage such amount represents of the net premiums written, and comparable amounts and percentages paid to noncontrolling producers for placements of the same kinds of insurance.

(8) A controlled insurer shall deliver written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer; except that, if the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain in his or her records a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured.
8 V.S.A. § 3581 — VT Code / Title 8 / Chapter 101 / Section 3581
§ 3581. Purpose; scope; intent
Status: in_force

(a) The purpose of this subchapter is to provide the requirements for maintaining a risk management framework and completing an Own Risk and Solvency Assessment (ORSA) and provide guidance and instructions for filing an ORSA Summary Report with the Commissioner.

(b) The requirements of this subchapter shall apply to all insurers domiciled in this State unless exempt under section 3586 of this subchapter.

(c) The General Assembly finds and declares that the ORSA Summary Report will contain confidential and sensitive information related to an insurer's or insurance group's identification of risks material and relevant to the insurer or insurance group filing the report. This information will include proprietary and trade secret information that has the potential for harm and competitive disadvantage to the insurer or insurance group if the information is made public. It is the intent of the General Assembly that the summary report required under this subchapter shall be a confidential document filed with the Commissioner, that it shall be shared only as stated in this subchapter and to assist the Commissioner in the performance of his or her duties, and that in no event shall the summary report be subject to public inspection and copying under the Public Records Act.
8 V.S.A. § 8013 — VT Code / Title 8 / Chapter 151 / Section 8013
§ 8013. Hearing on denial of certificate or rate application
Status: in_force

An adverse decision by the Commissioner under section 8002 of this title shall state the grounds and particulars on which the decision was based in such detail as to reasonably inform the affected party. Any party aggrieved by the decision may file a written notice and request a hearing before the Commissioner within 30 days of the decision. The appeal provisions set forth in 3 V.S.A. chapter 25 shall apply.
8 V.S.A. § 2102 — VT Code / Title 8 / Chapter 72 / Section 2102
§ 2102. Application for license
Status: repealed

(a) Application for a license or registration shall be in writing, under oath, and in the form prescribed by the Commissioner and shall contain the legal name, any fictitious name or trade name, and the address of the residence and place of business of the applicant; if the applicant is a partnership corporation, limited liability company, partnership, or other entity, the name and title of each key individual and person in control of the applicant; the county and municipality with street and number, if any, where the business is to be conducted; and such further information as the Commissioner may require.

(b) At the time of making an application, the applicant shall pay to the Commissioner a fee for investigating the application and a license or registration fee for a period terminating on the last day of the current calendar year. The following fees are imposed on applicants:

(1) For an application for a lender license under chapter 73 of this title, $1,000.00 as a license fee and $1,000.00 as an application and investigation fee for the initial license. For each additional lender license from the same applicant, $500.00 as a license fee and $500.00 as an application and investigation fee.

(2) For an application for a lender license under chapter 73 of this title for a lender only making commercial loans, $500.00 as a license fee and $500.00 as an application and investigation fee.

(3) For an application for a mortgage broker license under chapter 73 of this title, other than a mortgage broker that meets each of the requirements of subdivisions (4)(A) and (B) of this subsection, $500.00 as a license fee and $500.00 as an application and investigation fee.

(4) For an application for a mortgage broker license under chapter 73 of this title that meets each of the following requirements, $250.00 as a license fee and $250.00 as an application and investigation fee:

(A) the applicant is an individual sole proprietor; and

(B) no person, other than the applicant, shall be authorized to act as a mortgage broker under the applicant's license.

(5) For an application for a mortgage loan originator license under chapter 73 of this title, $50.00 as a license fee and $50.00 as an application and investigation fee.

(6) For an application for a sales finance company license under chapter 73 of this title, $350.00 as a license fee and $350.00 as an application and investigation fee.

(7) For an application for a loan solicitation license under chapter 73 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

(8) [Repealed.]

(9) For an application for a consumer litigation funding company registration under chapter 74 of this title, $200.00 as a registration fee and $300.00 as an application and investigation fee.

(10) For an application for a money transmission license under chapter 79 of this title, $1,000.00 as a license fee, $1,000.00 as an application and investigation fee, and $25.00 as a license fee for each authorized delegate location.

(11) For an application for a check cashing and currency exchange license under chapter 79 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

(12) For an application for a debt adjuster license under chapter 83 of this title, $250.00 as a license fee and $500.00 as an application and investigation fee.

(13) For an application for a loan servicer license under chapter 85 of this title, $1,000.00 as a license fee and $1,000.00 as an application and investigation fee.

(14) For an application for a personal information protection company license under chapter 78 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

(c) In connection with an application for a license, the applicant, each key individual, each person in control of the applicant, and any other person the Commissioner requires in accordance with NMLS guidelines or other multistate agreements shall furnish to the Nationwide Multistate Licensing System and Registry information concerning each person's identity, including:

(1) fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a state, national, and international criminal history background check;

(2) personal history and experience in a form prescribed by the Nationwide Multistate Licensing System and Registry, including the submission of authorization for the Nationwide Multistate Licensing System and Registry and the Commissioner to obtain:

(A) an independent credit report and credit score obtained from a consumer reporting agency described in 15 U.S.C. § 1681a for the purpose of evaluating the applicant's financial responsibility at the time of application; and the Commissioner may obtain additional credit reports and credit scores to confirm the licensee's continued compliance with the financial responsibility requirements of this part; and

(B) information related to any administrative, civil, or criminal findings by any governmental jurisdiction;

(3) if the individual has resided outside the United States at any time in the last 10 years, an investigative background report prepared by an independent search firm that meets the following minimum requirements:

(A) the search firm demonstrates that it has sufficient knowledge, resources, and employs accepted and reasonable methodologies to conduct the research of the background report;

(B) the search firm is not affiliated with nor has an interest with the individual it is researching; and

(C) the investigative background report is written in the English language and contains the following:

(i) if available in the individual's current jurisdiction of residency, a comprehensive credit report, or any equivalent information obtained or generated by the independent search firm to accomplish such report, including a search of the court data in the countries, provinces, states, cities, towns, and contiguous areas where the individual resided and worked;

(ii) criminal records information for the past 10 years, including felonies, misdemeanors, or similar convictions for violations of law in the countries, provinces, states, cities, towns, and contiguous areas where the individual resided and worked;

(iii) employment history;

(iv) media history, including an electronic search of national and local publications, wire services, and business applications; and

(v) financial services-related regulatory history, including money transmission, securities, banking, insurance, and mortgage-related industries; and

(4) any other information required by the NMLS or the Commissioner.

(d) The applicant shall provide a list of any material litigation in which the applicant has been involved in the 10-year period preceding the submission of the application.

(e) If an applicant is a corporation, limited liability company, partnership, or other entity, the applicant shall also provide:

(1) the date of the applicant's incorporation or formation and state or country of incorporation or formation;

(2) if applicable, a certificate of good standing from the state or country in which the applicant is incorporated or formed;

(3) a brief description of the structure or organization of the applicant, including any parent or subsidiary of the applicant, and whether any parent or subsidiary is publicly traded;

(4) the legal name, any fictitious or trade name, all business and residential addresses, and the employment, in the 10-year period preceding the submission of the application, of each key individual and person in control of the applicant;

(5) a list of any criminal convictions, material litigation, or disciplinary actions in which any executive officer, manager, responsible individual, director of, or individual in control of, the applicant has been involved in the 10-year period preceding the submission of the application;

(6) a copy of the applicant's audited financial statements for the most recent fiscal year and, if available, for the two-year period preceding the submission of the application;

(7) a copy of the applicant's unconsolidated financial statements for the current year, whether audited or not, and, if available, for the two-year period preceding the submission of the application;

(8) if the applicant is publicly traded, a copy of the most recent 10-K report filed with the U.S. Securities and Exchange Commission; and

(9) if the applicant is a wholly owned subsidiary:

(A) a copy of audited financial statements for the parent company for the most recent fiscal year; and

(B) of a corporation publicly traded in the United States, a copy of the parent corporation's most recent 10-K report filed with the U.S. Securities and Exchange Commission, or if the applicant is a wholly owned subsidiary of a corporation publicly traded outside the United States, a copy of similar documentation filed with the regulator of the parent corporation's domicile outside the United States.

(f) If the applicant is not an individual, the name and address of the applicant's registered agent in this State.

(g) Upon the filing of an application, the Commissioner shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the applicant and any person named in the application. The Commissioner may conduct an on-site investigation of the applicant, the cost of which the applicant shall bear pursuant to section 18 of this title.

(h) This section does not apply to a person applying for a commercial lender license under section 2202a of this title.
8 V.S.A. § 2576 — VT Code / Title 8 / Chapter 79 / Section 2576
§ 2576. Additional requirements and clarifications for virtual-currency business activities
Status: in_force

(a) To ensure adequate consumer protection, the Commissioner may adopt by rule provisions that specify limitations to and the method by which a person licensed under subchapter 2 of this chapter to engage in virtual-currency business activity may include virtual currency and virtual currency-denominated assets in the calculation of its net worth pursuant to section 2540 of this chapter.

(b) In addition to the records required to be maintained by sections 2119 and 2546 of this title and any other records the Commissioner requires pursuant to this chapter or rule, a person licensed under subchapter 2 of this chapter to engage in virtual-currency business activity shall maintain, for all virtual-currency business activity with or on behalf of a person, for at least five years after the date of the activity, a record of:

(1) each transaction of the licensee with or on behalf of the person or for the licensee's account in this state, including:

(A) the identity of the person;

(B) the form of the transaction;

(C) the amount, date, and payment instructions given by the person; and

(D) the account number, name, and U.S. Postal Service address of the person, and, to the extent feasible, other parties to the transaction;

(2) the aggregate number of transactions and aggregate value of transactions by the licensee with or on behalf of the person and for the licensee's account in this State, expressed in U.S. dollar equivalent of virtual currency for the previous 12 calendar months;

(3) each transaction in which the licensee exchanges one form of virtual currency for money or another form of virtual currency with or on behalf of the person;

(4) a general ledger posted at least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee;

(5) each business-call report the licensee is required to create or provide to the Department or NMLS;

(6) bank statements and bank reconciliation records for the licensee and the name, account number, and U.S. Postal Service address of each bank the licensee uses in the conduct of its virtual-currency business activity with or on behalf of the person;

(7) a report of any dispute with the person; and

(8) a report of any virtual-currency business activity transaction with or on behalf of a person that the licensee was unable to complete.

(c) It is unlawful for a person licensed under subchapter 2 of this chapter to engage in virtual-currency business activity, or any other person, in connection with the offer to sell, the offer to purchase, the sale, the purchase of a virtual currency, or in connection with any virtual-currency business activity or transaction in virtual currency, directly or indirectly:

(1) to employ a device, scheme, or artifice to defraud;

(2) to make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or

(3) to engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

(d) Persons licensed under subchapter 2 of this chapter to engage in virtual-currency business activity shall comply at all times with all applicable federal and state laws, rules, and regulations, including the following laws, as may be amended: the Securities Act of 1933, 15 U.S.C. §§ 77a–77aa, the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a–78oo, the Commodities Exchange Act of 1936, 7 U.S.C. §§ 1–27f, and the Vermont Securities Act, 9 V.S.A. chapter 150.
8 V.S.A. § 13202 — VT Code / Title 8 / Chapter 203 / Section 13202
§ 13202. Return of initial capital deposit
Status: in_force

The initial capital deposits, together with any dividends or interest credited thereon, may be returned, pro rata, to the contributors, or their heirs, executors, administrators, or assigns, subject to the following conditions and limitations:

(1) Prior to return of all or part of the initial capital reserve, the institution shall obtain the Commissioner's approval for such return.

(2) A return of all or part of the capital reserve may not reduce the institution's capital below the greater of the total initial capital contributions or the minimum amount prescribed by the Commissioner in accordance with section 14104 of this title.

(3) Upon release and return, the contributor's proportionate share of the amount to be returned shall be credited in his or her name to a share account or deposit in such institution, and the contributor shall then be entitled to all rights and privileges, and shall be subject to all duties and liabilities, connected with such share account or deposit.

(4) In the event of the liquidation of an institution before such contributions have been repaid in full, any portion of such contributions not required for the repayment of the expenses and the payment of creditors and other depositors in full, pursuant to chapter 209, subchapter 3 of this title, may be repaid pro rata to the capital depositors.
8 V.S.A. § 19205 — VT Code / Title 8 / Chapter 209 / Section 19205
§ 19205. Fiduciary powers; appointment of new trustee for trust accounts
Status: in_force

The conservator shall have the right to exercise all the fiduciary powers that the Vermont financial institution had been exercising. However, if all of the beneficiaries, named in any trust that the financial institution for which the conservator is appointed was trustee, desire another trustee appointed to administer and manage the trust, the Probate Division may appoint a new trustee for the trust.
8 V.S.A. § 3463 — VT Code / Title 8 / Chapter 101 / Section 3463
§ 3463. Domestic insurers
Status: reserved

(a) Subject to the provisions of sections 3461a, 3461b, and 3461c of this title, a domestic insurer, including a hospital service corporation established or licensed under the provisions of chapter 123 of this title and a medical service corporation established or licensed under the provisions of chapter 125 of this title, may prudently invest its assets in any of the following:

(1) Government obligations. Direct obligations of the United States for the payment of money, or obligations for the payment of money that are guaranteed or insured as to the payment of principal and interest by the United States.

(2) Government agency—Instrumentality obligations. Direct obligations for the payment of money, issued by an agency or instrumentality of the United States, or obligations for the payment of money that are guaranteed or insured as to the payment of principal or interest by an agency or instrumentality of the United States.

(3) State obligations. Bonds and other legally created direct general obligations of any state of the United States for the payment of money provided that any such state at the date of such investment shall not be in default in the payment of principal or interest on any of its direct general obligations.

(4) State political subdivision obligations. Bonds and other legally created direct general obligations of any political subdivision of any state of the United States for the payment of money provided that any such political subdivision at the date of such investment shall not be in default in the payment of principal or interest on any of its direct general obligations.

(5) Development credit corporations. Evidences of indebtedness, and shares of stock issued by a development credit corporation incorporated under the general laws of the State of Vermont and subject to supervision by the Commissioner as provided by the laws of the State.

(6) Obligations and stock of certain federal agencies. An insurer may invest in the obligations or stock, or both, of the following agencies of the government of the United States of America, whether or not such obligations are guaranteed by such government:

(A) Commodity Credit Corporation.

(B) Federal Intermediate Credit Banks.

(C) Federal Land Banks.

(D) Central Bank for Cooperatives and Banks for Cooperatives.

(E) Federal Home Loan Banks.

(F) Federal National Mortgage Association.

(G) Any other similar agency of the government of the United States of America and of similar financial quality.

(7) International bank for reconstruction and development. Obligations issued or guaranteed by the international bank for reconstruction and development; provided, however, that the aggregate amount of such investments that are held at any time shall not exceed five percent of its total admitted assets.

(8) Inter-American Development Bank. Obligations issued or guaranteed by the Inter-American Development Bank; provided, however, that the aggregate amount of such investments that are held at any time by any domestic insurer shall not exceed five percent of its total admitted assets.

(9) Revenue bonds. Bonds and other obligations of the United States of America, of any state thereof, or of any political subdivision thereof, or of any public authority or instrumentality of one or more of the foregoing, that are payable as to both principal and interest from adequate special revenues pledged or otherwise appropriated or by law required to be provided for the purpose of such payment, but not including any obligations payable solely out of special assessments on properties benefited by local improvements.

(10) Equipment trust obligations. Equipment trust obligations or other instruments evidencing an interest in or ownership of personal property where there is a right to receive determined portions of rental, purchase or other fixed obligatory payments for the use or purchase of such personal property, provided the aggregate investments therein shall not exceed 10 percent of the total admitted assets of such life insurance company.

(11) Corporate obligations. Fixed interest and variable interest bearing obligations issued, assumed or guaranteed by any solvent institution, whether or not secured, that are not in default as to principal or interest and that have been or will be registered with the SVO or that meet and continue to meet the conditions for exemption as provided in section 3461d of this title.

(12) Equity interests.

(A) An insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction or Canada.

(B) A life and health insurer shall not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this subdivision would exceed 20 percent of its admitted assets or the amount of equity interests then held by the insurer that are not listed on a qualified exchange would exceed five percent of its admitted assets. An accident and health insurer shall not be subject to this section but shall be subject to the same aggregate limitation on equity interests as a property and casualty insurer under subdivision (C) of this subdivision (12).

(C) A property and casualty insurer shall not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section would exceed the greater of 25 percent of its admitted assets or 100 percent of its surplus as regards policyholders.

(D) An insurer shall not acquire under this section any investments that the insurer may acquire under subdivisions (a)(19) through (a)(25) of this section.

(E) An insurer shall not short sell equity investments unless the insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within six months of the short sale.

(13) Asset-backed securities. An insurer's investment in the asset-backed securities secured by or representing an interest in a single asset or pool of assets held by a trust or other business entity shall not exceed five percent of the insurer's admitted assets.

(14) Stock and obligations of mortgage companies.

(A) Stock and obligations of any solvent institution created or existing under the laws of the United States or of any state thereof that is engaged primarily in the business of making, originating, purchasing, or otherwise acquiring or investing in, and servicing, or selling or otherwise disposing of, loans secured by mortgages on real property located in the United States, whether for its own account or as mortgage loan correspondent for others, or both, provided that immediately prior to such investment by a domestic insurer such institution shall be acting as, or shall be under a contract to act as, a mortgage loan correspondent for such insurer.

(B) The amount invested under this subdivision in any one such institution shall not exceed one-tenth of one percent of the admitted assets of such insurer. The cost of any investment made under this subdivision when added to the aggregate cost of all other investments made under this subdivision and then held by such insurer shall not exceed one-half of one percent of the admitted assets of such insurer.

(15) Derivative investments and transactions. An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this subdivision, on the following conditions:

(A) General conditions.

(i) An insurer may use derivative instruments under this subchapter to engage in hedging transactions and certain income generation transactions;

(ii) An insurer shall be able to demonstrate to the Commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of the transactions through cash flow testing or other appropriate analyses.

(B) Limitations on hedging transactions. An insurer may enter into hedging transactions under this section if, as a result of and after giving effect to the transaction:

(i) The aggregate statement value of options, caps, floors, and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed seven and one-half percent of its admitted assets;

(ii) The aggregate statement value of options, caps, and floors written in hedging transactions does not exceed three percent of its admitted assets; or

(iii) The aggregate potential exposure of collars, swaps, forwards, and futures used in hedging transactions does not exceed six and one-half percent of its admitted assets.

(C) Limitations on income generation transactions. An insurer may enter into the following types of income generation transactions if, as a result of and after giving effect to the transactions, the aggregate statement value of the fixed income assets that are subject to call or that generate the cash flows for payments under the caps or floors, plus the face value of fixed income securities underlying a derivative instrument subject to call, plus the amount of the purchase obligations under the puts, does not exceed 10 percent of its admitted assets:

(i) sales of covered call options on noncallable fixed income securities, callable fixed income securities if the option expires by its terms prior to the end of the noncallable period or derivative instruments based on fixed income securities;

(ii) sales of covered call options on equity securities if the insurer holds in its portfolio or can immediately acquire through the exercise of options, warrants, or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold;

(iii) sales of covered puts on investments that the insurer is permitted to acquire under this subchapter if the insurer has escrowed or entered into a custodian agreement, segregating cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put during the complete term of the put option sold; or

(iv) sales of covered caps or floors if the insurer holds in its portfolio the investments generating the cash flow to make the required payments under the caps or floors during the complete term that the cap or floor is outstanding.

(D) Counterparty exposure. An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of sections 3461a and 3461b of this title.

(16) Policy loans. Indebtedness secured by the extent thereof by the loan value of life insurance policies or annuity contracts.

(17) Collateral loans. Obligations secured by a pledge of personal property, whether the same be tangible or intangible, upon the condition that the collateral be marketable and is fairly worth sufficiently in excess of the amount of the loan to make it a sound and prudent investment.

(18) Unsecured loans. Unsecured obligations of any person or corporation, provided that any such loan or investment in excess of $2,500.00 shall be supported by the signed financial statement of the borrower, or supported by any other assurances satisfactory to insurer, which evidence the financial stability of such obligator. No insurer shall loan or make investments under this section in an amount greater than one-fourth of one percent of its admitted assets as to any one loan transaction or investment, nor shall the aggregate amounts so loaned or invested exceed two percent of the admitted assets of such insurer.

(19) Acceptances and bills of exchange. Bank certificates of deposit and bankers' acceptances, and other bills of exchange of the kind and maturities made eligible by law for purchase in the open market by federal reserve banks.

(20) Mortgage loans—Real estate. Obligations for the payment of money secured by first mortgages on real estate situated within any state or territory of the United States or the District of Columbia upon the following conditions:

(A) The security for the loan shall be a first lien upon timberland or improved real estate, including mines, and quarries, except that a first mortgage on lands impressed with a public use, sometimes known as society or glebe lands, but held under a durable lease, or lands subject to lease under which rents are reserved to the owner and with all of the owner's rights and options under the lease are collaterally assigned to the insurer as security, shall nonetheless be deemed to be a first lien as in this subdivision (A) required; provided, however, there is no condition or right of reentry or forfeiture, not insured against by a responsible title insurance company qualified to do business in the state wherein the mortgaged property is located, under which, in the case of real estate other than leaseholds, such lien can be cut off or subordinated or otherwise disturbed or under which, in the case of leaseholds, the insurer is unable to continue the lease in force for the duration of the loan.

(i) Nothing herein shall prohibit any loan or investment by reason of the existence of any prior lien for grounds rents, taxes, assessments, or other similar charges not delinquent.

(ii) Real estate shall not be deemed to be encumbered, within the meaning of this subdivision, by reason of the existence of instruments reserving or granting rights-of-way, mineral rights, oil or timber rights or easements, provided such interests do not unreasonably interfere with the use of the real estate contemplated at the time of investment.

(iii) A leasehold estate shall constitute real estate under this subdivision only if it has an unexpired term of not less than 21 years, inclusive of the term or terms that may be provided by enforceable options of renewal, provided the underlying fee simple estate is not subject to any prior lien or encumbrance; and no mortgage loan upon a leasehold shall be made or acquired unless the terms thereof shall provide for the complete amortization of principal by the end of four-fifths of the period of the leasehold, inclusive of the period or periods that may be provided by enforceable options of renewal, that is unexpired at the time the loan is made, and shall further provide that the amount of required principal and interest payable in any prior full year.

(B) No such mortgage loan or loans made or acquired on any one property shall exceed 75 percent of the appraised value of the real estate, and the terms thereof shall provide for: (i) payments of principal, whatever the period of the loan so that at no time during the period of the loan shall the aggregate payments of principal theretofore required to be made under the terms of the loan be less than would have been necessary for a loan payable completely by the end of 30 years through payments of interest only for five years; and (ii) substantially equal payments of principal and interest at the end of each year thereafter, except that loans secured by dwellings for use by not more than two families may exceed 75 percent of the appraised value of the real estate but shall not be greater than 80 percent unless the secured real estate be located in the state of Vermont, in which event said loans shall not be greater than 90 percent; and, anything in this subdivision to the contrary notwithstanding, loans secured chiefly by timberland, mines or quarries shall not exceed 50 percent of the appraised value of the real estate nor have a maturity greater than five years. If there is no provision for substantially complete amortization of principal as hereinabove provided, then in that event no such mortgage loan or loans made or acquired on any one property shall exceed 66⅔ percent of the appraised value and the same shall be made payable upon demand or within not to exceed two years.

(C) The appraised value of real estate securing any mortgage loan shall be established and evidenced by the written appraisal of a qualified real estate appraiser who may be an employee of the insurer, except that in the case of property to be qualified hereunder as timberland, mines or quarries, the appraisal must be made by an engineer or geologist or other person qualified in the relevant field.

(D) If the obligation is purchased, no payment thereon shall be more than 30 days overdue at the time of the investment.

(E) No mortgage loan made or acquired that is a participation or a part of a series or issue secured by the same mortgage shall be a lawful investment under this subdivision unless (i) the entire series or issue is held by such insurer, or (ii) the insurer holds a participation in such mortgage giving it, by written agreement with all other participants, substantially, rights of a first mortgagee, or (iii) the loan is evidenced by bonds, notes or evidences of indebtedness forming part of an issue of bonds, notes or evidences of indebtedness secured by a mortgage that, if there are more than five holders of such issue at the time such mortgage loan is made or acquired by such insurer, or if there are more than three holders of such issue at that time and such issue aggregates less than $5,000,000.00 in original principal amount, shall be to a bank, trust company, or national bank duly authorized and licensed to act as a corporate trustee in its state of domicile (with or without a co-trustee), provided that such issue is all of equal rank.

(F) Each mortgage loan must be supported by evidence satisfactory to insurer that such mortgage is a first lien on the secured real estate as in this subdivision provided.

(G) Insurer shall not invest more than 60 percent of its admitted assets pursuant to this subdivision.

(H) Insurer shall not invest under this subdivision more than two percent of its admitted assets in obligations of any one obligor.

(21) Mortgage loans—Insured or guaranteed. Obligations for the payment of money secured by mortgages guaranteed or insured, as the case may be, as follows:

(A) by the Federal Housing Administration under the terms of an act of Congress of the United States of June 27, 1934, entitled the “National Housing Act,” as heretofore or hereafter amended;

(B) by the Administrator of Veterans' Affairs, pursuant to the provisions of Title III of an act of Congress of the United States of June 22, 1944, entitled the “Servicemen's Readjustment Act of 1944,” as heretofore or hereafter amended, provided that any excess investment over 80 percent of the appraised value is guaranteed;

(C) by the United States, any state, territory, or district thereof, or of any instrumentality, agency, or political subdivision of one or more of the foregoing, provided that any excess investment over 75 percent of the appraised value is so insured or guaranteed;

(D) any mortgage loan so guaranteed or insured as in this subdivision (21) provided, shall not be subject to the provisions of any law of this state prescribing the nature, amount or form of security, or requiring security upon which loans or advances of credit may be made, or prescribing or limiting the period or principal amount for that loans or advances of credit may be made, or prescribing or limiting the interest that may be charged or taken upon any loan or advance of credit.

(22) Mortgage loans—Additionally secured by assignment of certain leases. Obligations for the payment of money under the following conditions:

(A) the obligation shall be secured by a first mortgage or lien on real or personal property and additionally secured by assignment of the mortgagor's interest, as lessor, on a lease or leases on said property located within any state of the United States, any territory thereof, or the District of Columbia;

(B) such lease or leases shall be collaterally assigned for the benefit of the insurer, and shall be nonterminable upon foreclosure of any lien upon the leased property;

(C) the rents payable under such lease or leases shall be sufficient to provide for amortization during the term of the lease of not less than 60 percent of the investment with interest thereon as to real property and 80 percent as to personal property;

(D) such lease or leases shall be noncancelable by lessee during the term of the lease or period of the obligation, whichever is less, other than in the event of lessor's default therein, condemnation, or destruction of the leased property to the extent that it is no longer tenantable for the purposes to which it was devoted at the time of destruction, by any hazard excluding, however, from the provisions of this subdivision (D) leases to the United States government or its agencies;

(E) the lessee or lessees under the lease or leases, or any corporation or corporations that have assumed or guaranteed any lessee's performance thereunder shall be the United States government, its agencies, any state of the United States, or political subdivision thereof, or a corporation or corporations whose obligations would be eligible for investment by an insurer in accordance with the provisions of subdivision (11) of this section;

(F) insurer shall not invest more than 10 percent of its admitted assets pursuant to this section; and

(G) insurer shall not invest under this subdivision more than two percent of its admitted assets in the obligations of any one obligor or in obligations secured by leases to any one corporation.

(23) Mortgage loans—Personal property. Obligations for the payment of money secured by first mortgages or liens, including conditional sale contracts, on tangible personal property situated within any state, territory or district of the United States, provided no such investment made or acquired shall at the time of acquisition exceed 75 percent of the fair market value of the property secured.

(24) Real estate—Company business. Real estate (including leasehold interests) for the convenient accommodation of the insurer's business operations, including home office, branch office and field operations, on the following conditions:

(A) any parcel of real estate acquired under this provision may include excess space for rent to others if it is reasonably anticipated that such excess will be required by the insurer for expansion or if the excess is reasonably required in order to have a building that will be an economic unit;

(B) such real estate may be subject to a mortgage; and

(C) an insurer's aggregate investment under this provision will not exceed 10 percent of its admitted assets, except with the permission of the commissioner if he or she finds that such percentage of its admitted assets are insufficient to provide convenient accommodation for the insurer's business.

(25) Real estate and personal property under lease. Real estate in the United States or its territories under lease or commitment for lease and personal property for intended use in the United States under lease, or commitment for lease, on the following conditions:

(A) the lessee or the guarantor of lessee's obligations under the lease is a corporation with tangible net worth of $500,000.00 or more;

(B) the lease provides for a net rental sufficient to amortize the investment with interest over the primary term of the lease or 40 years, whichever is less;

(C) insurer shall not invest in real estate under lease more than 10 percent of its admitted assets pursuant to this subdivision; and

(D) insurer shall not invest in personal property under lease more than five percent of its admitted assets pursuant to this subdivision.

(26) Real estate—Income producing. Real estate and equipment incident and related to the operation of said real estate for the production of income, or as may be acquired to be improved or developed for such investment purpose pursuant to an existing program therefor, situated in any state of the United States of America, any territory thereof, or the District of Columbia, and the construction thereon of improvements, on the following conditions:

(A) The term “real estate” as used in this subdivision shall include any real property and interest therein, including any interest on, above, or below the surface of the land; any leasehold estate therein; and any interest held or to be held by the insurer in cotenancy with one or more other institutions.

(B) The insurer's investment shall not exceed the reasonable value of the property or of the interest therein acquired.

(C) The insurer may let contracts for construction and pay costs of construction and leasing, hold, maintain, lease, and manage the property, collect rents and other income therefrom, and sell the property in whole or in part.

(D) The property may be encumbered by leases to tenants and by rights-of-way, easements, mineral reservations, building restrictions, and restrictive covenants, provided none of them can interfere substantially with the use of the property or result in a forfeiture of the property, unless a policy of title insurance, issued by a responsible title insurer qualified to do business in the state wherein the property is located, insures the company against loss or damage arising from such encumbrances or reversionary rights.

(E) Insurer shall not invest more than 10 percent of its admitted assets under this subdivision.

(27) Real estate—Participation. Any of the investments that are authorized by subdivisions (24), (25), and (26) of this subsection may be made by an insurer through ownership of:

(A) voting capital stock of a corporation;

(B) an interest in a partnership, joint venture, or other form of business entity.

(28) Foreign investments. Investments in foreign jurisdictions subject to the following:

(A) Any domestic insurer that is authorized to do business in a foreign jurisdiction or possession of the United States or that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in a foreign jurisdiction or possession of the United States may invest in, or otherwise acquire or loan upon securities and investments in such foreign jurisdiction or possession that are substantially of the same kind, classes, and investment grades as those eligible for investment under the provisions of this chapter; but the aggregate amount of such investments in a foreign jurisdiction or a possession of the United States and of cash in the currency of such jurisdiction or possession that is at any time held by such insurer shall not exceed one and one-half times the amount of its reserves and other obligations under such contracts or the amounts that such insurer is required by law to invest in such jurisdiction or possession;

(B) In addition to the foreign investments permitted under subdivision (A) of this subdivision (28), any domestic insurer may invest or otherwise acquire or loan upon securities and investments in foreign countries that are substantially of the same kinds, classes, and investment grades as those eligible for investment under this chapter; but:

(i) The aggregate amount of such investments made pursuant to this subdivision (B) shall not exceed 20 percent of its admitted assets; and

(ii) The aggregate amount of foreign investments then held by the insurer under this subdivision in a single foreign jurisdiction shall not exceed 10 percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or five percent of its admitted assets as to any other foreign jurisdiction (three percent in the case of life and health insurers). Of the investments permitted under this subdivision, the aggregate amount of investments denominated in foreign currencies may not exceed 15 percent of the insurer's admitted assets (10 percent in the case of life and health insurers). Such investments denominated in the foreign currency of a single foreign jurisdiction that has a sovereign debt rating of SVO 1 may not exceed 10 percent of the insurer's admitted assets. Such investments denominated in the foreign currency of a single foreign jurisdiction that does not have a sovereign debt rating of SVO 1 may not exceed five percent of the insurer's admitted assets (three percent in the case of life and health insurers).

(29) Other loans or investments. Loans or investments not qualifying or permitted under this chapter in an amount not exceeding 10 percent of a domestic insurer's admitted assets regardless of whether the same or similar type investment has been included in or omitted from any provision of this chapter.

(b) Investments in subsidiaries are subject to section 3682 of this title and are not subject to any other investment limitations contained in this subchapter.
8 V.S.A. § 4813i — VT Code / Title 8 / Chapter 131 / Section 4813i
§ 4813i. Exemption from examination
Status: repealed

(a) An individual who applies for an insurance producer license in this State who was previously licensed for the same lines of authority in another state shall not be required to complete any prelicensing education or examination. This exemption is only available if the person is currently licensed in that state or if the application is received within 90 days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's producer database records, maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested.

(b) A person licensed as an insurance producer in another state who moves to this State shall make application within 90 days of establishing legal residence to become a resident licensee pursuant to section 4813f of this subchapter. No prelicensing education or examination shall be required of that person to obtain any line of authority previously held in the prior state except where the Commissioner determines otherwise by regulation.

(c) A person who applies for a limited lines travel insurance producer license under chapter 148 of this title shall not be required to be examined by the Commissioner.

(d), (e) [Repealed.]

(f) At the discretion of the Commissioner, a limited lines producer may be exempt from examination.
8 V.S.A. § 2760b — VT Code / Title 8 / Chapter 83 / Section 2760b
§ 2760b. Prohibited activities
Status: in_force

(a) No person, partnership, association, corporation, or other entity, except a licensee, may make any representation, directly or indirectly, orally or in writing that he, she, or it is licensed under this chapter.

(b) No licensee shall advertise its services in any media, whether print or electronic, in any manner that may be false or deceptive. All such advertisements shall contain the name and office address of such entity, which shall conform to a name and address on record with the Department and that shall indicate that the licensee is licensed by the Department.

(c) No person or any other entity, other than a licensee, shall use the titles “debt adjuster,” “budget planner,” “licensed debt adjuster,” or “licensed budget planner” or the terms “debt adjuster,” “debt reduction,” “budget planning,” or, in each case, words of similar import in any public advertisement, business card, or letterhead.

(d) No licensee shall commingle monies received from debtors with any other funds associated with the operation of its business or with any funds associated with any other type of business; provided, however, that for the sole purpose of making a single payment to a creditor, a licensee may commingle monies received from debtors under contract with one or more of its affiliates authorized to engage in debt adjustment in another state.

(e) No licensee shall structure an agreement for the debtor that, at the conclusion of the agreement, would result in negative amortization of any of the debtor's obligations to any creditor.

(f) No licensee, or a director, manager, or officer of such licensee, or any immediate family member of such individual, or a controlling party of such licensee, shall purchase any obligation of a debtor.

(g) No licensee, or a director, manager, or officer of such licensee, or any immediate family member of such individual, or a controlling party of such licensee, shall lend money or provide credit to the debtor.

(h) No licensee, or a director, manager, or officer of such licensee, or any immediate family member of such individual, or a controlling party of such licensee shall obtain a mortgage or other security interest in property of the debtor.

(i) No licensee shall operate as a person or entity seeking payment of obligations on behalf of any creditors that are not receiving payments pursuant to a contract between a debtor and a licensee.

(j) No licensee shall execute any contract or agreement to be signed by the debtor unless the contract or agreement is fully completed, and the duration of any such contract shall be in conformance with any limitations specified pursuant to rules adopted by the Commissioner.

(k) No licensee shall pay any bonus or other consideration to any person or entity for the referral of a debtor to its business, or accept or receive any bonus, commission, or other consideration for referring any debtor to any person or entity for any reason; provided, however, that nothing herein shall prohibit the payment of rebates from creditors to licensees.

(l) No licensee shall disclose or threaten to disclose information concerning the existence of a debt or any other conduct that could coerce payment of the debt of a debtor with whom it has a contract.

(m) No licensee shall use a communication that simulates in any manner a legal or judicial process, or that gives the false appearance of being authorized, issued, or approved by a government, a governmental agency, or an attorney-at-law.

(n) No licensee, or a director, a manager, or an officer of such licensee, or any immediate family member of such individual, or a controlling party of such licensee, shall be a director, a manager, an officer, an owner, or a controlling party of any creditor or a subsidiary of any such creditor, that is receiving or will receive payments from the licensee on behalf of a debtor with whom the licensee has contracted, without the express written consent of the Commissioner.
8 V.S.A. § 31306 — VT Code / Title 8 / Chapter 221 / Section 31306
§ 31306. Supervisory committee
Status: in_force

(a) The supervisory committee shall consist of no fewer than three members of the credit union, none of whom shall simultaneously serve as a director, serve on the credit committee, serve as an officer of the credit union, and be otherwise regularly employed by such credit union. Supervisory committee members shall be members of the credit union in good standing.

(b) Supervisory committee members shall be appointed by the directors at the first regularly scheduled meeting of the entire governing body at which a quorum is present following the annual meeting of the members. Supervisory committee members shall hold office for the term provided in the bylaws, as long as such supervisory committee member remains qualified to serve, and until the committee member's successor has been duly appointed and qualified. The term of a supervisory committee member shall not exceed three years. A supervisory committee member may serve more than one term. If the supervisory committee members are appointed for terms in excess of one year, their terms of office shall be staggered so that, insofar as possible, an equal number expires each year.

(c) The supervisory committee shall be responsible for ensuring that members of senior management and directors meet required financial reporting objectives and establish practices and procedures sufficient to safeguard members' assets. To meet its responsibilities, the supervisory committee shall determine whether internal controls are established and effectively maintained; accounting records and financial reports are promptly prepared and accurate; relevant plans, policies, and procedures established by the governing body are properly administered; and the governing body's plans, policies, and control procedures are sufficient to safeguard against error, carelessness, conflict of interest, self-dealing, and fraud.

(d) The supervisory committee shall have the sole authority to engage or terminate outside and internal auditors. The supervisory committee may engage any assistance necessary for the performance of its duties, including having any audit, examination, or verification required by law, regulation, or bylaw. Any agreement between the supervisory committee and an outside auditor shall be documented by an engagement letter that specifies the terms, conditions, and objectives of the engagement or statement of agreed-upon procedures in accordance with this subsection and shall permit access by the Commissioner to the work papers of the auditor.

(e) The supervisory committee shall make or cause to be made a comprehensive annual audit of the books and affairs of the credit union, including its assets, liabilities, capital, income, expense accounts, and the minutes of all governing body and governing-body-appointed committee meetings. Such audit shall cover the period elapsed since the last audit. The annual audit shall include an assessment of internal controls and security measures in place covering the credit union's electronic information processing and its electronic commerce systems, if any. Any compensated outside auditors performing audits for the supervisory committee shall be independent of any management employee, any member of the governing body, any member of a governing-body-appointed committee, the credit manager, any loan officer, and any member of the immediate families of any of these. The annual audit shall meet the following minimum guidelines:

(1) a credit union with total assets of $100 million or more shall have an opinion audit of the credit union's financial statement performed by an independent licensed certified public accountant; and

(2) a credit union with total assets of less than $100 million shall have:

(A) an opinion audit of its financial statements performed by an independent licensed certified public accountant; or

(B) an opinion audit of its balance sheet performed by an independent licensed certified public accountant; or

(C) an agreed-upon procedures engagement performed by a person having adequate technical training and proficiency as an auditor commensurate with the level of sophistication and complexity of the credit union under audit, provided if such engagement is not comprehensive, the supervisory committee shall satisfy any remaining requirements of a comprehensive audit in accordance with this subsection and that, in any event, shall meet the minimum standards and guidelines established by regulation of the National Credit Union Administration (NCUA); or

(D) a comprehensive audit performed by the supervisory committee or the credit union's internal auditors or the internal auditor of another credit union, which audit shall meet the minimum standards and guidelines established by regulation of the NCUA.

(f) The supervisory committee shall perform or cause to be performed a verification of members' accounts at least once every two years through:

(1) verification of share and loan accounts of all members;

(2) statistical sampling of member share and loan accounts done in connection with an opinion audit of the financial statements performed by an independent licensed certified public accountant; or

(3) verification of accounts and passbooks in accordance with the requirements of the National Credit Union Administration.

(g) The supervisory committee shall make any additional audits and supplemental verifications and examinations of the affairs of the credit union that it deems appropriate or that the governing body or Commissioner requires.

(h) Promptly following the completion of an audit or other verification or examination, the supervisory committee shall:

(1) file a written report at the main office of the credit union;

(2) present the report to the governing body at its next meeting;

(3) provide a summary of the results of the audit to the members of the credit union, orally or in writing, at the next annual meeting, and if the audit was not performed by the supervisory committee, the outside auditor shall provide the written or oral summary thereof; and

(4) file a copy of the written report and any written summary with the Commissioner.

(i) The supervisory committee shall provide related working papers, policies, and procedures concerning the annual audit, internal audit, examination, and verification to the Commissioner upon the Commissioner's request and shall require any independent licensed or certified public accountant, internal auditor, or any other auditor to provide such related working papers, policies, and procedures concerning the annual audit, internal audit, examination, and verification to the Commissioner upon the Commissioner's request. The governing body shall require that the auditor submit to the governing body a signed report of the audit or examination showing the condition of the credit union within a reasonable period of time from the effective date of the audit or examination.

(j) At any time that the supervisory committee discovers any operating practices of the credit union that it deems unsafe that have not been corrected by the governing body, the supervisory committee shall give notice to all credit union members of a special meeting of members to be held for the purpose of receiving the report of the supervisory committee of such operating practices. The membership of the credit union shall have the authority to accept or reject the report of the supervisory committee.

(k) The supervisory committee shall meet as often as necessary and at least annually and shall keep complete minutes of all of its meetings, including the names of those members present.

(l) If the supervisory committee or its independent auditor or other person fails to comply with requirements of this section or the terms of an engagement letter required by this section, the Commissioner may:

(1) reject the audit report and provide a reasonable opportunity to correct deficiencies;

(2) impose the remedies available in subsection (m) of this section, provided any of the conditions specified in that subsection are present; and

(3) seek formal administrative sanctions against the supervisory committee or its independent auditor, or both.

(m) The Commissioner may compel a credit union to obtain an audit that meets the minimum requirements of subdivision (e)(1) or (2)(A) of this section for any fiscal year in which any of the following three conditions are present:

(1) the supervisory committee has not obtained or performed an audit;

(2) the supervisory committee had obtained or performed an audit that does not meet the requirements of this section; or

(3) the credit union has experienced serious and persistent recordkeeping deficiencies.

(n) The Commissioner may compel a credit union to obtain an opinion audit of its financial statement performed in accordance with generally accepted auditing standards by an independent person who is licensed by the State of Vermont, even if such audit is not required by subsection (e) of this section, for any fiscal year in which the credit union has experienced serious and persistent recordkeeping deficiencies.

(o) For purposes of this section, a recordkeeping deficiency is “serious” if the Commissioner reasonably believes that the governing body and the management of the credit union have not met financial reporting objectives in a timely manner and established practices and procedures sufficient to safeguard members' assets. A serious recordkeeping deficiency is “persistent” when it continues beyond a usual, expected, or reasonable period of time.
8 V.S.A. § 3932 — VT Code / Title 8 / Chapter 105 / Section 3932
§ 3932. Definitions
Status: in_force

For the purposes of this subchapter:

(1) “Regular assessment” shall mean that amount charged to members, in advance or arrears, to pay ordinary losses and expenses for one year or the term of the policy and to make a contribution to surplus.

(2) “Assessment cooperative insurance corporation” means a corporation meeting the financial requirements of section 3916 of this title, which charges its insureds regular assessments necessary to pay losses, meet expenses, and contribute to surplus.

(3) “Nonassessment cooperative insurance corporation” means a corporation meeting the financial requirements of sections 3916, 3930, and 3931 of this title, which charges its insureds premiums in advance necessary to pay losses, meet expenses, and contribute to surplus.

(4) “Special assessment” means an additional charge to the policyholder, beyond the regular assessment or premium charge, to satisfy unexpected losses or expenses, or contributions to surplus.
8 V.S.A. § 11501 — VT Code / Title 8 / Chapter 201 / Section 11501
§ 11501. Examinations
Status: in_force

(a) The Commissioner shall conduct a regular examination of the condition of each Vermont financial institution at least once every three years or more frequently as the Commissioner determines it to be prudent.

(b) The Commissioner may at any time conduct a special examination or may expand the scope of any regular examination. An entity examined pursuant to this subsection shall be responsible for examination fees and expenses provided in section 18 of this title and collected as provided in subsections 19(c) and (e) of this title.

(c) The Commissioner shall be given access to all the files, books, accounts, securities, and assets of the financial institution and any person under contract with it to perform services for the financial institution that the Commissioner deems material to the financial condition of the financial institution and shall be afforded every reasonable facility for making an examination of the affairs of the financial institution and such person under contract.

(d) Whenever the Commissioner deems it necessary, the Commissioner may examine any company, the majority of the stock of which is owned by a Vermont financial institution, or that is found by the Commissioner to be controlled by a Vermont financial institution. In addition, whenever the Commissioner deems it necessary in the conduct of the exercise of the Commissioner's supervisory authority over a financial institution, the Commissioner may review the records of any person that controls a Vermont financial institution. In furtherance of the conduct of the exercise of the Commissioner's supervisory authority over a Vermont financial institution, to the extent not prohibited by federal law, and upon the request of the Commissioner, a person that controls a financial institution shall furnish to the Commissioner copies of reports filed with the Federal Reserve Board or the Office of Thrift Supervision. Such person shall also consent to the request by the Commissioner to the Federal Reserve Board or the Office of Thrift Supervision for any other information pertaining to such person. The Commissioner shall not disclose any information obtained pursuant to this section that is treated as confidential by the Federal Reserve Board or the Office of Thrift Supervision. Nothing in this section shall be construed to grant any additional examination, supervisory, or regulatory authority over any person that controls a Vermont financial institution.
8 V.S.A. § 19305 — VT Code / Title 8 / Chapter 209 / Section 19305
§ 19305. Duties and rights of receiver
Status: in_force

The receiver shall collect, sue, and receive the debts and demands due and the property that belong to the Vermont financial institution and shall convert into cash its real and personal estate and, upon the approval of the Superior judge, may borrow money and pledge any part or all of the assets of such financial institution as security for such loan and shall make report to the court of the condition of the trust at such times as the Superior judge orders.
8 V.S.A. § 3869 — VT Code / Title 8 / Chapter 105 / Section 3869
§ 3869. Contracts considered made in Vermont
Status: in_force

Every fire insurance contract written on any property located in this State shall be deemed to be made, executed, and delivered in this State.
8 V.S.A. § 4595 — VT Code / Title 8 / Chapter 125 / Section 4595
§ 4595. Change in control; material transactions; redomestication; establishment or acquisition of control of insurance company subsidiary
Status: in_force

(a)(1) No corporation permitted to engage in business under this chapter shall merge or consolidate with, sell, transfer, or exchange more than a 10-percent interest in the corporation or its assets to, or sell, transfer, or exchange more than 10 percent of its subscribers to, or otherwise transfer or commit more than a 10-percent interest in itself to, any other person, whether accomplished through one transaction or a series of transactions, without the Commissioner's prior written approval.

(2) No corporation permitted to engage in business under this chapter shall transfer its domicile to any other state or jurisdiction without the prior written approval of the Commissioner.

(3) A corporation permitted to engage in business under this chapter shall obtain the Commissioner's written approval prior to establishing or acquiring control of a for-profit or not-for-profit entity that is authorized to engage in the business of insurance under chapter 101 or chapter 139 of this title or the insurance law of any other U.S. jurisdiction. For purposes of this subdivision, “control” shall have the same meaning as in subdivision 3681(3) of this title. In addition to any other investment limitations established pursuant to this title, investments in entities authorized to engage in the business of insurance under chapter 101 or 139 of this title or the insurance law of any other U.S. jurisdiction shall be limited to 25 percent of total assets of the nonprofit medical services corporation in the aggregate; provided, however, that this limitation shall exclude investments in existence on May 1, 2004.

(b) A corporation shall make application to the Commissioner for approval of any transaction set forth in subsection (a) of this section describing in detail the proposed transaction and identifying the parties involved. The Commissioner may require the filing of additional information as the Commissioner finds necessary or appropriate for the full consideration of the application. The applicant shall establish to the Commissioner's satisfaction that the transaction meets the general good of the State. To the extent applicable in the circumstances, the Commissioner shall consider, but is not limited to, the following factors in the general good determination:

(1) whether, after the transaction, the corporation continues to satisfy the requirements for a permit to do business under this chapter;

(2) whether the effect of the transaction would be to substantially lessen competition in health insurance in this State or tend to create a monopoly in health insurance in this State;

(3) whether the financial condition of any acquiring or acquired party is such as might jeopardize the financial stability of the corporation or prejudice the interest of its subscribers;

(4) whether the transaction contemplates the liquidation of the corporation or any other material change in its business or corporate structure or management, that would be unfair or unreasonable to its subscribers or not in the public interest;

(5) whether the competence, experience, and integrity of those persons who would control the operation of the new entity, or the acquiring or acquired party are such that it would not be in the interest of the public to permit the transaction;

(6) whether the transaction will promote cost-effective, high-quality health care in the State; and

(7) such other factors as the Commissioner deems relevant to the transaction.

(c) The Commissioner shall investigate and hold at least one public hearing on the application. The public hearing shall be held within 30 days of the filing of a complete application with the Commissioner, and at least 20 days' notice thereof shall be given by the Commissioner to the person filing the application and the office of the Attorney General. The applicant shall give seven days' notice to any person as ordered by the Commissioner. The Commissioner may order such public notice as may be deemed necessary for full consideration of the transaction. The Commissioner shall make a determination within 30 days after the conclusion of such hearing. If a determination of general good is made, the Commissioner shall give the corporation a certificate to that effect. In the event of conflict between the provisions of section 3305 or 3683 of this title and the provisions of this section, the provisions of this section shall control.

(d) The Commissioner may consider the review or portion of a review of the transaction by the insurance department of another state, district, or territory of the United States if the Commissioner finds that the review or portion of review conducted by the other jurisdiction is substantially similar in nature and scope as a review or portion of review under this section.

(e) Any corporation permitted to engage in business under this chapter may, upon the approval of the Commissioner under subsections (a) and (b) of this section, and in compliance with such conditions as may be imposed by the Commissioner, transfer its domicile, in accordance with the laws thereof, to any other state or jurisdiction, and upon such a transfer, it shall cease to be a domestic corporation and its corporate or other legal existence in this State shall cease upon the filing of proof of such redomestication with the Secretary of State and upon payment to the Secretary of State of a filing fee in the amount of $100.00. Such corporation shall be permitted to do business in this State under this chapter as a foreign corporation, upon compliance with the qualification requirements for foreign corporations under section 4593 of this title. The Commissioner may require any corporation redomesticating under this section to form an adequately capitalized affiliate or subsidiary corporation under this chapter, whenever the Commissioner determines that such a requirement is in the best interests of members or subscribers and will promote the general good of the State.

(f) A for profit or not for profit entity established or acquired with the Commissioner's approval granted under this section shall be governed by the provisions of chapter 101 or 139 of this title, as applicable, and not the provisions of this chapter, other than this section.

(g) Nothing in this section shall be construed to limit any common law authority of the Attorney General with respect to a nonprofit health care conversion, nor shall this section be construed to limit the application of Title 11B to any transaction reviewable under this section.

(h) Any application filed with the Commissioner under this section shall be accompanied by a fee of $10.00.
8 V.S.A. § 3791c — VT Code / Title 8 / Chapter 103 / Section 3791c
§ 3791c. Actuarial opinion of reserves
Status: in_force

(a) Actuarial opinion of reserves after the operative date of the Valuation Manual; general. Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this State and subject to regulation by the Commissioner shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this State. The Valuation Manual will prescribe the specifics of this opinion, including any items deemed to be necessary to its scope.

(b) Actuarial analysis of reserves and assets supporting reserves. Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this State and subject to regulation by the Commissioner, except as exempted in the Valuation Manual, shall also annually include in the opinion required by subsection (a) of this section, an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the Valuation Manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts.

(c) Requirements for opinions subject to this section.

(1) Each opinion required by this section, in a form and substance as specified in the Valuation Manual, and acceptable to the Commissioner, shall be prepared to support each actuarial opinion.

(2) If the company fails to provide a supporting memorandum at the request of the Commissioner within a period specified in the Valuation Manual or the Commissioner determines that the supporting memorandum provided by the company fails to meet the standards prescribed by the Valuation Manual or is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the Commissioner.

(d) Requirement for all opinions subject to this section.

(1) Every opinion shall be in form and substance as specified in the Valuation Manual and acceptable to the Commissioner.

(2) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the Valuation Manual.

(3) The opinion shall apply to all policies and contracts subject to subsection (b) of this section, plus other actuarial liabilities as may be specified in the Valuation Manual.

(4) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the Valuation Manual.

(5) In the case of an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this State.

(6) Except in cases of fraud or willful misconduct, the appointed actuary shall not be liable for damages to any person, other than the company and the Commissioner, for any act, error, omission, decision, or conduct with respect to the appointed actuary's opinion.

(7) Disciplinary action by the Commissioner against the company or the appointed actuary shall be defined in rules adopted by the Commissioner.
8 V.S.A. § 4502 — VT Code / Title 8 / Chapter 121 / Section 4502
§ 4502. Exemption of certain societies
Status: in_force

(a) Nothing contained in this chapter shall be so construed as to affect or apply to:

(1) grand or subordinate lodges of societies, orders, or associations now doing business in this State that provide benefits exclusively through local or subordinate lodges;

(2) orders, societies, or associations that admit to membership only persons engaged in one or more crafts or hazardous occupations, in the same or similar lines of business, insuring only their own members, their families, and descendants of members, and the ladies' societies, or ladies' auxiliaries to the orders, societies, or associations;

(3) domestic societies that limit their membership to employees of a particular city or town, designated firm, business house, or corporation that provide for a death benefit of not more than $400.00 or disability benefits of not more than $350.00 to any person in any one year, or both; or

(4) domestic societies or associations of a purely religious, charitable, or benevolent description, which provide for a death benefit of not more than $400.00 or for disability benefits of not more than $350.00 to any one person in any one year, or both.

(b) A society or association described in subdivision (a)(3) or (4) of this section that provides for death or disability benefits for which benefit certificates are issued, and society or association included in subdivision (a)(4) that has more than 1,000 members, is not exempted from the provisions of this chapter but shall comply with all its requirements.

(c) No society that, by the provisions of this section, is exempt from the requirements of this chapter, except any society described in subdivision (a)(2) of this section, shall give or allow, or promise to give or allow to any person any compensation for procuring new members.

(d) A society that provides for benefits in case of death or disability resulting solely from accident and that does not obligate itself to pay natural death or sick benefits has all of the privileges and is subject to all the applicable provisions and rules of this chapter, except that the provisions of this chapter relating to medical examination, valuations of benefit certificates, and incontestability do not apply to the society.

(e) The Commissioner of Financial Regulation may require from any society or association, by examination or otherwise, such information as will enable him or her to determine whether the society or association is exempt from the provisions of this chapter.

(f) Societies, exempted under the provisions of this section, shall also be exempt from all other provisions of the insurance laws of this State.
8 V.S.A. § 14212 — VT Code / Title 8 / Chapter 204 / Section 14212
§ 14212. Joint fiduciary accounts
Status: in_force

(a) Statement of purpose. The purpose of this section is to create a new form of joint financial account for which the account owner designates a fiduciary with authority to use monies in the account for the benefit and under the direction of the account owner and to enable the account owner as well as law enforcement to enforce the terms of the declaration of intent.

(b) A “joint fiduciary account” is created by a deposit in a financial institution in the name of an owner naming a fiduciary or several fiduciaries when the owner has received a disclosure statement and executed a declaration of intent as provided in this section. An “owner” may be one or more joint owners of the account. Only the owner may designate a fiduciary at the time an account is opened, or may substitute or remove a fiduciary. A fiduciary shall act only in accordance with the declaration of intent and shall have authority to take all actions permitted by the terms and conditions of the account that are consistent with the declaration of intent.

(c) The declaration of intent shall include date of execution; name and signature of owner; name and signature of fiduciary; any limitations on the power of the fiduciary to distribute or expend the funds; whether the fiduciary is to be paid and, if so, how much and on what basis; name and signature of two or more witnesses, neither of whom shall, at the time of execution, be the fiduciary and who attest to the sound mind and lack of duress on the owner; acknowledgment of receipt by the fiduciary of a copy of the declaration; and notice to the fiduciary that a withdrawal or expenditure of the funds in the joint fiduciary account that is not in accordance with the declaration of intent may result in criminal or civil liability. The financial institution that is to hold the joint fiduciary account shall provide its name and address and the number of the account.

(d) A disclosure statement must accompany a declaration of intent. The disclosure statement and declaration of intent shall be in not less than 10- point type and in substantially the following form:

(1) Disclosure Statement:

INFORMATION CONCERNING JOINT FIDUCIARY ACCOUNTS

A joint fiduciary account allows you to give direction on how you would like your money to be spent, at the same time as it allows you to give another person (or persons) authority to withdraw money or write checks on your account. If you open a joint fiduciary account, you are considered the “owner” of the account. The person or persons you authorize to access the account are called a “fiduciary.” The fiduciary shall handle your money in a way that is beneficial to you and to act according to your instructions. You, as the owner, always have the right to withdraw money from or to write checks on the account.

One way to understand the advantages of a joint fiduciary account is to compare it to alternative forms of accounts. A regular joint account is an account in two or more names. Both people have the same authority to take and use the money. Thus, even if the money really belongs to one of the account holders, and the intent was that it would be used for that person, nothing can be done to stop the other account holder from taking and using all the money for other purposes.

A sole account with multiple authorized signatures provides a little more protection than a regular joint account. At least it is clear with this account that the money really belongs to the person whose name is on the account, and does not belong to those who are only authorized to sign. (There are often tax reasons for a person to have a sole account with multiple authorized signatures rather than a joint account.) Nevertheless, nothing can be done to stop a person who is authorized to sign on the account from taking and using all the money for some purpose other than for the person whose money it is.

A joint fiduciary account provides more protection for the owner than either of the other accounts because the owner makes a clear statement about how the money can be used, and the fiduciary has to follow those instructions or be subject to civil or criminal liability, or both. The fiduciary is also legally required to keep track of how the money is spent so the owner or another authorized person can verify that the money was used according to the instructions.

How do you want your money to be spent?

If you open a joint fiduciary account, you decide how you want your money to be spent. This statement should be broad enough to include everything you need and want, but not so broad as to go too far beyond that. Thus, you might want to instruct the fiduciary to spend your money on “all my basic living expenses and, if any money is left over, on gifts to my children and grandchildren, but not to exceed five percent of deposits per year.” What is included in the instructions to the fiduciary is completely up to you. If you want to pay your fiduciary for the services provided, or if you want your fiduciary to be able to make gifts to himself or herself or others, you must explicitly indicate that in your declaration of intent.

Do you want special instructions on accountings?

If you give no special instructions on accountings, the fiduciary must just keep track of how the money is spent and provide that information to you, your legal representative, a state agency or a court, but only if asked to do so. You might want to instruct your fiduciary to give a periodic accounting to you or to someone else. Thus, your instructions could include: “Give a copy of an accounting of your use of this account to me and to my attorney [or my daughter] every January.”

If you want more than one fiduciary, what do you want their relationship to be?

For some account owners, it is useful to name more than one fiduciary. For example, you might want your daughter to be the primary fiduciary, but your nephew to be the fiduciary when she goes to Florida every winter. You can name more than one fiduciary, but it is useful for you to give them instructions on when you want each to act. Those instructions dictate how they should act. However, the financial institution holding the account is under no obligation to make sure the fiduciaries act in accordance with your instructions; it will still accept either signature as valid for taking money out of the account.

Are you trying to make sure your fiduciary takes certain actions, or just trying to give your fiduciary authority to act?

Sometimes an account owner wants to use the account to make sure the fiduciary takes certain actions, such as paying the utility bills or paying the mortgage. The joint fiduciary account cannot guarantee for you that the fiduciary will act as you hope. The account simply authorizes the fiduciary to act, but does not oblige the fiduciary to act. The same is true for a regular joint account, as well as a sole account with multiple authorized signatures. For any of these accounts, if you want to make sure certain bills are paid, you and your creditor may agree to have the creditor automatically debit your account on a specific day of the month for the amount of your bill.

Have you already given or do you want to give someone authority to make decisions for you beyond using the money in an account?

Creating a joint fiduciary account will only give the fiduciary authority to act on your behalf with regard to the monies held in the account. It can be combined with a power of attorney or a durable power of attorney (one that lasts even if you are no longer able to make decisions for yourself). You can name the same person to be your fiduciary on a joint fiduciary account and your agent under a power of attorney, or you can name different people for each. In either event, it is useful to think through who should be named in each document and the relationship between them if you are going to name different people. If you have an attorney preparing a power of attorney, consider consulting with the attorney when opening a joint fiduciary account.

THE JOINT FIDUCIARY ACCOUNT WILL NOT BE VALID UNLESS A DECLARATION OF INTENT IS SIGNED BY YOU IN THE PRESENCE OF TWO OR MORE WITNESSES WHO ARE NOT A NAMED FIDUCIARY, AND IS ALSO SIGNED BY THE FIDUCIARY.

(2) Declaration of Intent:

DECLARATION OF INTENT FOR JOINT FIDUCIARY ACCOUNT

OWNER OF ACCOUNT

I/We ____________ , hereby open a Joint Fiduciary Account.

Following are my instructions to the fiduciary for how monies that are deposited into this joint fiduciary account shall be used:

_________________________________________

_________________________________________

(Attach additional pages as necessary)

I/We hereby appoint __________ of __________ (town of residence) and ______ of ______ (town of residence) to be the fiduciary(ies) on the account, and acknowledge that I/we have received a copy of “Information Concerning Joint Fiduciary Accounts”.

Dated at _______ , this ___ day of ____ , 20__ .

__________ Signature of Owner of Account

Dated at _______ , this ___ day of ____ , 20__ .

__________ Signature of Owner of Account

WITNESSES

I declare that the owner(s) appear(s) to be of sound mind and free from duress at the time of signing this Declaration of Intent for a joint fiduciary account, and that the owner(s) affirmed that he and/or she is (are) aware of the nature of the document and is (are) signing it freely and voluntarily. I further declare that I am not a person named as a fiduciary.

__________________

Witness Signature ________ Dated: ______

Witness Address ________

Witness (Print Name) _______

__________________

Witness Signature ________ Dated: ______

Witness Address ________

Witness (Print Name) _______

FIDUCIARIES (Only one is required.)

I declare that I am willing to act as the fiduciary on the Joint Fiduciary Account of __________ (owner(s)). I have read the Declaration of Intent and agree to use the money in the account only for the purposes stated in the Declaration. I further agree to maintain accurate records of my use of any monies in the account and to produce them upon request by the owner, by a legal representative of the owner, by a state agency, or by a court. I understand that my authority to act ceases when an owner changes the fiduciary, closes the account, or the last owner has died. I further acknowledge that I may be sued civilly if I intentionally or negligently fail to abide by the terms of the Declaration of Intent, or may be charged criminally if I intentionally fail to abide by its terms, or both. I acknowledge that I have received a copy of the Declaration of Intent.

____________

Fiduciary (Print Name)

_________________________________________

Fiduciary Address

__________________ Date _________________________________________

Fiduciary Signature

If more than one:

____________

Fiduciary (Print Name)

_________________________________________

Fiduciary Address

__________________ Date _________________________________________

Fiduciary Signature

For Financial Institution Use Only:

Financial Institution Name: ____ Account Number: _________________________________________ Address: _________________________________________

(3) The Commissioner shall have the authority to adopt rules amending the disclosure statement and declaration of intent to reflect changes necessitated by a change in law or to make minor changes to the forms in this subsection.

(e) The fiduciary shall maintain accurate records to permit an accounting of the acts of the fiduciary, and shall provide such records and accounting if requested to do so by the owner, by a legal representative of the owner, by the Attorney General, a State's Attorney, or the Department of Disabilities, Aging, and Independent Living if any has reason to believe the fiduciary is in violation of this section, or by a court of competent jurisdiction.

(f) All rights, title, interest, and claim to a joint fiduciary account, and any additions or accumulations to the account, shall be the property of the owner of the account. An owner shall have authority to take all actions permitted by the terms and conditions of the account. The designation of a fiduciary shall not affect the title to funds in the account, and the owner shall not be considered to have made a gift to the fiduciary of all or any portion of the funds in the joint fiduciary account, or to any additions or accumulations to the account. The fiduciary shall have no right of survivorship in the account unless such right is specifically provided for in the account title.

(g) The financial institution holding a joint fiduciary account shall retain a signed copy of the declaration of intent according to the financial institution's records retention policy. Notwithstanding any provision of law to the contrary, no financial institution shall be responsible for monitoring transactions to or from any joint fiduciary account. A financial institution shall not be liable for withdrawals and payments made by the fiduciary unless an owner has notified the financial institution, in accordance with the terms and conditions of the account, to change the fiduciary, or has closed the account, or the financial institution has been notified that the last owner is deceased.

(h) Any owner who sustains damages or injury as a result of a fiduciary's action or inaction in violation of this section or the declaration of intent may sue the fiduciary for appropriate equitable relief, and may sue and recover from the fiduciary the amount of his or her damages, reasonable attorney's fees, and exemplary damages not exceeding three times the owner's damages. Nothing in this section shall be construed to abrogate any other causes of action or relief at law or equity to which the owner is entitled under other laws or at common law.

(i) Whenever the Attorney General or a State's Attorney has reason to believe that a fiduciary has used or is about to use the proceeds in a joint fiduciary account in violation of the declaration of intent, the Attorney General or a State's Attorney may bring an action in the name of the State against such person to restrain by temporary or permanent injunction the use of funds from the account. The action may be brought in the Superior Court of the county in which the joint fiduciary account is located, where the owner resides, or where the fiduciary resides, has a place of business, or is doing business. In addition to the foregoing, the Attorney General or a State's Attorney may request, and the Court is authorized to render, any other temporary or permanent relief, or both, as may be in the public interest, including closing the account, replacing the fiduciary, ordering restitution of cash to the account, imposing of a civil penalty of not more than $10,000.00 for each violation, and ordering reimbursement to the State of Vermont for the reasonable value of its services and expenses in investigating and prosecuting the action. In addition to the foregoing, the Attorney General or a State's Attorney may seek relief under 33 V.S.A. chapter 69, subchapter 2 or may charge the fiduciary pursuant to 13 V.SA. § 2028.
8 V.S.A. § 6052 — VT Code / Title 8 / Chapter 142 / Section 6052
§ 6052. Risk retention groups chartered in this State
Status: in_force

(a) Pursuant to the provisions of chapter 141 of this title, a risk retention group shall be chartered and licensed to write only liability insurance pursuant to this chapter, must comply with all of the laws, rules, regulations, and requirements applicable to such insurers chartered and licensed in this State under chapter 141 of this title, and with subdivisions 6053(4), (5), (7), and (8) of this title. A risk retention group chartered in this State may provide coverage for payment of punitive damages, the multiplied portion of multiple damages, or other penalties in the nature of compensatory damages, and any such coverage shall be enforceable against such risk retention group in accordance with its terms.

(b) Before it may offer insurance in any state, each risk retention group shall also submit for approval to the Commissioner of this State a plan of operation and feasibility study that includes a description of the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer, together with such additional information as the Commissioner may reasonably require. In considering and approving the risk retention group's plan of operation and any subsequent amendments thereto, the Commissioner may limit the net amount of risk retained by a risk retention group. The risk retention group shall submit for approval by the Commissioner an appropriate revision in the event of any subsequent material change in any item of the plan of operation or feasibility study, including any material change in the information called for in subsection (c) of this section, but excluding the identity of policyholders and any changes in rates or rating classification systems. The group shall not offer any additional kinds of liability insurance, in this State or in any other state, until a revision of such plan or study is approved by the Commissioner. The risk retention group shall inform the Commissioner of any material changes in rates or rating classification systems within 30 days of the adoption of such change.

(c)(1) At the time of filing its application for charter, the risk retention group shall provide to the Commissioner in summary form the following information:

(A) the identity of the initial policyholders or members of the group or if the identity is not known or cannot be determined, a description of who is eligible to be a policyholder or a member;

(B) the identity of the persons that organized the group;

(C) the identity of any persons that will act as a managing general agent or reinsurance intermediary for, provide other significant administrative services to, or otherwise influence or control the activities of the group;

(D) summary descriptions of the services, described in subdivision (C) of this subdivision (1), and of any contracts under which the services are to be performed, including the method of compensation therefor;

(E) the amount and nature of initial capitalization;

(F) plans for the payment of dividends or other distributions of members' capital and surplus; and

(G) the states in which the group intends to file.

(2) Information submitted pursuant to this subsection, including any subsequent updates, amendments, or revisions of or to such information, shall be and remain confidential and may not be made public by the Commissioner or an employee or agent of the Commissioner without the written consent of the company, except that:

(A) The Commissioner may, in the Commissioner's discretion, disclose or publish or authorize the disclosure or publication of any such record or report or any part thereof in the furtherance of legal or regulatory proceedings brought as a part of the Commissioner's official duties. The Commissioner may, in the Commissioner's discretion and in a manner the Commissioner deems proper, disclose or publish or authorize the disclosure or publication of any such record or report or any part thereof to criminal law enforcement authorities for use in the exercise of the authority's duties.

(B) The Commissioner may, in the Commissioner's discretion, disclose such information to a public officer having jurisdiction over the regulation of insurance and with other state, federal, or international agencies, provided that:

(i) such public official shall agree in writing to maintain the confidentiality of such information; and

(ii) the laws of the state or foreign government in which such public official serves require such information to be and remain confidential.

(C) The Commissioner may provide access to confidential application information with respect to risk retention groups to representatives of the National Association of Insurance Commissioners to inspect, but not copy, such information in connection with accreditation examinations, provided the National Association of Insurance Commissioners agrees in writing to maintain the confidentiality of such information.

(D) Neither the Commissioner nor any person who received documents pursuant to this subsection, material, or information while acting under the authority of the Commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, material, or information.

(E) Nothing in this subsection (c) shall excuse an applicant from making any required disclosure under the federal liability Risk Retention Act of 1986, this chapter, or chapter 141 of this title.

(d) The provisions of subsection 6008(c) and sections 3573 and 3574 of this title shall apply to risk retention groups chartered in this State, except that such provisions shall not apply to final examination reports relating to risk retention groups and except that the Commissioner may, in the Commissioner's discretion, grant access to any other examination information covered by subsection 6008(c) of this title to representatives of the National Association of Insurance Commissioners to inspect (but not copy) such information in connection with accreditation examinations, so long as the National Association of Insurance Commissioners agrees in writing to maintain the confidentiality of such information.

(e) The provisions of chapter 101, subchapter 13 of this title shall apply to risk retention groups chartered in this State. However, no existing rule, regulation, or order promulgated under section 3688 of this title shall apply to a risk retention group chartered in this State unless the rule, regulation, or order or a provision thereof is specific to risk retention groups. The Commissioner shall establish procedures to implement the provisions of chapter 101, subchapter 13 of this title as applied to risk retention groups chartered in this State by rule, regulation, or order.

(f) The provisions of chapter 159 of this title (risk based capital for insurers) shall apply to risk retention groups chartered in this State, except that the Commissioner may elect not to take regulatory action as otherwise required by sections 8303-8306 of chapter 159 of this title, provided at least one of the following conditions exist:

(1) The Commissioner determines that the risk retention group's members or sponsoring organization, or both, are sufficiently capitalized to support the operations of the risk retention group. As required by the Commissioner, the members or sponsoring organization, or both, shall provide evidence of:

(A) an investment grade credit rating from a nationally recognized statistical rating organization or rating of A- or better by the A. M. Best Company;

(B) an excess of assets over liabilities of at least $100 million; or

(C) an excess of assets over liabilities of at least 10 times the risk retention group's largest net retained per occurrence limit.

(2) Each policyholder qualifies as an industrial insured under the law of his or her home state or under Vermont law, whichever the Commissioner determines to be more stringent.

(3) The risk retention group's certificate of authority was issued prior to January 1, 2011 and, based on a minimum of five years of solvent operation, is specifically exempted from the requirements for mandatory action in writing by the Commissioner.

(g) This subsection establishes governance standards for a risk retention group.

(1) As used in this subsection:

(A) “Board of directors” or “board” means the governing body of a risk retention group elected by risk retention group members to establish policy, elect or appoint officers and committees, and make other governing decisions.

(B) “Director” means a natural person designated in the articles of the risk retention group or designated, elected, or appointed by any other manner, name, or title to act as a member of the governing body of the risk retention group.

(C) “Independent director” means a director who does not have a material relationship with the risk retention group. A director has a material relationship with a risk retention group if the director, or a member of the director's immediate family:

(i) In any 12-month period, receives from the risk retention group, or from a consultant or service provider to the risk retention group, compensation or other item or items of value in an amount equal to or greater than five percent of the risk retention group's gross written premium or two percent of the risk retention group's surplus, as measured at the end of any fiscal quarter falling in such 12-month period, whichever is greater. This provision also applies to compensation or items of value received by any business with which the director is affiliated. Such material relationship shall continue for one year after receipt of the item or items of value or the compensation falls below the threshold established in this subdivision.

(ii) Has a relationship with an auditor as follows: Is affiliated with or employed in a professional capacity by a current or former internal or external auditor of the risk retention group. Such material relationship shall continue for one year after the affiliation or employment ends.

(iii) Is employed as an executive officer of another business entity that is affiliated with the risk retention group by virtue of common ownership and control, if such entity meets all of the following criteria:

(I) the entity is not an insured of the risk retention group;

(II) the entity has a contractual relationship with the risk retention group; and

(III) the governing board of the entity includes executive officers of the risk retention group, unless a majority of the membership of such entity's governing board is composed of individuals who are members of the governing board of the risk retention group.

(IV) Such material relationship shall continue until the employment or service ends.

(iv) Notwithstanding subdivisions (i)–(iii) of this subdivision (g)(1)(C), a director who is a direct or indirect owner of the risk retention group is deemed to be independent; and an officer, director, or employee of an insured of the risk retention group is deemed to be independent, unless some other relationship of such officer, director, or employee qualifies as a material relationship.

(D) “Material service provider” includes a captive manager, auditor, accountant, actuary, investment advisor, attorney, managing general underwriter, or other person responsible for underwriting, determination of rates, premium collection, claims adjustment or settlement, or preparation of financial statements, whose aggregate annual contract fees are equal to or greater than five percent of the risk retention group's annual gross written premium or two percent of its surplus, whichever is greater. It does not mean defense counsel retained by a risk retention group, unless the defense counsel's annual fees have been equal to or greater than five percent of a risk retention group's annual gross premium or two percent of its surplus, whichever is greater, during three or more of the previous five years.

(2) The board shall have a majority of independent directors. The board of directors shall determine whether a director is independent; review such determinations annually; and maintain a record of the determinations, which shall be provided to the Commissioner annually. If the Commissioner disagrees with the board's determination regarding independence, the board, within six months, shall take such actions as are necessary in order to obtain written confirmation from the Commissioner that the board meets the independence requirements set forth in subdivision (1)(C) of this subsection.

(3) The term of any material service provider contract entered into with a risk retention group shall not exceed five years. The contract, or its renewal, requires approval of a majority of the risk retention group's independent directors. The board of directors has the right to terminate a contract at any time for cause after providing adequate notice, as defined in the terms of the contract.

(4) A risk retention group shall not enter into a material service provider contract without the prior written approval of the Commissioner.

(5) A risk retention group's business plan shall include written policies approved by its board of directors requiring the board to:

(A) provide evidence of ownership interest to each risk retention group member;

(B) develop governance standards applicable to the risk retention group;

(C) oversee the evaluation of the risk retention group's management, including the performance of its captive manager, managing general underwriter, or other person or persons responsible for underwriting, rate determination, premium collection, claims adjustment and settlement, or preparation of financial statements;

(D) review and approve the amount to be paid under a material service provider contract; and

(E) at least annually, review and approve:

(i) the risk retention group's goals and objectives relevant to the compensation of officers and material service providers;

(ii) the performance of officers and material service providers as measured against the risk retention group's goals and objectives;

(iii) the continued engagement of officers and material service providers.

(6) A risk retention group shall have an audit committee composed of at least three independent board members. A nonindependent board member may participate in the committee's activities, if invited to do so by the audit committee, but he or she shall not serve as a committee member. The Commissioner may waive the requirement of an audit committee if the risk retention group demonstrates to the Commissioner's satisfaction that having such committee is impracticable and the board of directors is able to perform sufficiently the committee's responsibilities. The audit committee shall have a written charter defining its responsibilities, which shall include:

(A) Assisting board oversight of the integrity of financial statements, compliance with legal and regulatory requirements, and qualifications, independence, and performance of the independent auditor or actuary.

(B) Reviewing quarterly financial statements and annual audited financial statements with management.

(C) Reviewing annual audited financial statements with its independent auditor and, if it deems advisable, the risk retention group's quarterly financial statements as well.

(D) Reviewing risk assessment and risk management policies.

(E) Meeting with management, either directly or through a designated representative of the committee.

(F) Meeting with independent auditors, either directly or through a designated representative of the committee.

(G) Reviewing with the independent auditor any audit problems and management's response.

(H) Establishing clear hiring policies applicable to the hiring of employees or former employees of the independent auditor by the risk retention group.

(I) Requiring the independent auditor to rotate the lead audit partner having primary responsibility for the risk retention group's audit so that no individual performs audit services for the risk retention group for more than five consecutive fiscal years. In a form and manner prescribed by the Commissioner, a risk retention group may request a waiver from the rotation requirement of this subdivision. In determining whether to grant a waiver request, the Commissioner may consider:

(i) the number and expertise of the independent auditor's partners;

(ii) the number of insurance clients the independent auditor has;

(iii) the premium volume of the risk retention group;

(iv) the number of jurisdictions in which the risk retention group transacts business; and

(v) any other factor deemed relevant by the Commissioner.

(J) Reporting regularly to the board of directors.

(7) The board of directors shall adopt governance standards, which shall be available to risk retention group members through electronic or other means, and provided to risk retention group members, upon request. The governance standards shall include:

(A) a process by which risk retention group members elect directors;

(B) director qualifications, responsibilities, and compensation;

(C) director orientation and continuing education requirements;

(D) a process allowing the board access to management and, as necessary and appropriate, independent advisors;

(E) policies and procedures for management succession; and

(F) policies and procedures providing for an annual performance evaluation of the board.

(8) The board of directors shall adopt a code of business conduct and ethics applicable to directors, officers, and employees of the risk retention group and criteria for waivers of code provisions, which shall be available to risk retention group members through electronic or other means, and provided to risk retention group members, upon request. Provisions of the code shall address:

(A) conflicts of interest;

(B) matters covered under the Vermont corporate opportunities doctrine;

(C) confidentiality;

(D) fair dealing;

(E) protection and proper use of risk retention group assets;

(F) standards for complying with applicable laws, rules, and regulations; and

(G) mandatory reporting of illegal or unethical behavior affecting operation of the risk retention group.

(9) The president or chief executive officer or, in the case of a risk retention group formed as a limited liability company or as a reciprocal insurer, an individual authorized by the board of directors of a risk retention group shall promptly notify the Commissioner in writing of any known material noncompliance with the governance standards established in this subsection.

(h) The provisions of chapter 101, subchapter 7A of this title (own risk and solvency assessment) shall apply to risk retention groups chartered in this State.
8 V.S.A. § 12603 — VT Code / Title 8 / Chapter 202 / Section 12603
§ 12603. Merchant banks
Status: in_force

(a) A merchant bank is a financial institution organized under the provisions of this title whose activities are generally limited to lending and investing. Deposit activity is prohibited. Unless otherwise indicated in this chapter, a merchant bank has all the powers, duties, and obligations of a financial institution under this title. As one of the purposes of merchant banks is to provide needed capital or investments to businesses that may be impermissible or imprudent for depository financial institutions, its lending and investment activities are less restricted. Except as provided in this section, a merchant bank has all the powers of and is entitled to engage in the business of a financial institution, including powers with respect to investments, loans, and transactions.

(b) A merchant bank may not solicit, receive, or accept money or its equivalent on deposit as a regular business within the meaning of subdivision 11101(11) of this title or engage in deposit-like activities as determined by the Commissioner. A merchant bank may deposit cash, whether constituting principal or income, in any financial institution, whether within or outside this State, if the account is held either in the name of the customer to which the cash belongs or in the name of the merchant bank and is composed entirely of cash belonging to the customer, the respective contributions of which are reflected in the books and records of the merchant bank.

(c) A merchant bank may issue drafts drawn on itself in the form of treasurer's or cashier's checks.

(d) No merchant bank shall engage in business as a merchant bank in this State without first obtaining a certificate of authority from the Commissioner pursuant to this section and sections 11703 and 12103 of this title.

(e) The organizational documents of a merchant bank that are filed with the Secretary of State shall contain the following statement: “This organization is subject to the Vermont law on merchant banks, 8 V.S.A. § 12603, and does not have the power to solicit, receive, or accept money or its equivalent on deposit.” This statement in the organizational documents of a merchant bank may not be amended.

(f) The minimum amount of initial capital for a merchant bank is $1,000,000.00, all of which shall be common stock or equity interest in the merchant bank. A merchant bank may use qualified subordinated debt or senior debt as part of its capital structure above $1,000,000.00, provided that the amount of subordinated debt or senior debt used as capital above $1,000,000.00 is not greater than the amount of common stock or equity interest used as capital above $1,000,000.00. The Commissioner, in his or her discretion, may increase the minimum capital required for a merchant bank.

(g) A merchant bank shall maintain minimum capital in accordance with section 14104 of this title. The Commissioner may establish different standards for merchant banks than for other financial institutions organized under this title. The minimum capital standards for a merchant bank may not be less than a level equal to 150 percent of the tier 1 risk-based capital and 150 percent of total risk-based capital established from time to time by the Board of Governors of the Federal Reserve System for a well-capitalized bank.

(h) A merchant bank may convert to any other type of investor-owned financial institution pursuant to chapter 206 of this title.

(i) Notwithstanding section 14103 of this title, a merchant bank may use as a part of its name the word or words “bank,” “banker,” or “banking,” or the plural of or any abbreviations of those words.

(j) At least 30 days prior to the establishment of any office for the transaction of its business, a merchant bank shall notify the Commissioner.

(k) The following provisions of this title are inapplicable to merchant banks: sections 12201 and 14110; subsection 14301(d); chapters 203 and 205; and chapter 204, subchapter 2.

(l) Prior to making a loan, the terms of any loans by a merchant bank to or investments by a merchant bank shall be disclosed to the governing body of the merchant bank when the loan is to any of the following:

(1) a person who owns 25 percent or more of the merchant bank's common stock or similar equity capital;

(2) a member of the governing body of the merchant bank;

(3) an executive officer or manager of the merchant bank; or

(4) a company, 25 percent of the voting shares or other similar voting equity of which is owned by a person or entity listed in subdivisions (1) through (3) of this subsection.

(m) Any acquisition or change in control of 10 percent or more of the common stock or equity interests in a merchant bank shall be subject to the prior approval by the Commissioner. The acquiring person shall file an application with the Commissioner for approval. The application shall be subject to the provisions of chapter 201, subchapter 7 of this title.

(n) The Commissioner shall examine the merchant bank and any person who controls it to the extent necessary to determine the soundness and viability of the merchant bank in the same manner as required by chapter 201, subchapter 5 of this title.

(o) A merchant bank shall include on all its advertising a prominent disclosure that deposits are not accepted by a merchant bank.

(p) For purposes of this section, “control” means that a person:

(1) directly, indirectly, or acting through another person owns, controls, or has power to vote 10 percent or more of any class of equity interest of the merchant bank;

(2) controls in any manner the election of a majority of the directors of the merchant bank; or

(3) directly or indirectly exercises a controlling influence over the management or policies of the merchant bank.

(q) A merchant bank formed and authorized under this chapter shall:

(1) maintain its principal place of business in this State;

(2) appoint a registered agent to accept service of process and to otherwise act on its behalf in this State, provided that whenever such registered agent cannot with reasonable diligence be found at the Vermont registered office of the merchant bank, the Secretary of State shall be an agent of such merchant bank upon whom any process, notice, or demand may be served;

(3) hold at least one meeting of its governing body in this State each year; and

(4) have at least one Vermont resident as a member of its governing body.
8 V.S.A. § 3472 — VT Code / Title 8 / Chapter 101 / Section 3472
§ 3472. Earnings statements and income ratios-Special situations
Status: in_force

In the application of the provisions and requirements of this subchapter to determine whether a particular investment in any corporation, association, or institution is qualified the following shall be applicable:

(1) When a corporation, association, or institution, whether or not it has been in existence during the whole or whatever period may be required by the particular provision of this chapter under which it is sought to be qualified as an investment, has been constituted in the form that it has at the time of such investment by consolidation, acquirement of merger, the adjusted pro forma consolidated earnings statement may be used to determine the income ratios as provided by any such provisions.

(2) Similarly, for the purpose of determining such income ratios for holding corporations or institutions with subsidiaries, the consolidated earnings statement of parent and subsidiary institutions may be used.
8 V.S.A. § 1804 — VT Code / Title 8 / Chapter 65 / Section 1804
§ 1804. Tax exempt status
Status: in_force

Being an institution of public welfare created primarily to increment, augment, and increase sources of taxation within the State, and, in order to induce continuing public support to the corporation, earnings of the corporation shall be exempt from State income taxes, and the holder or holders of any security issued by the corporation shall, in like manner, be exempt from payment of income taxes on dividends or interest paid thereon.
8 V.S.A. § 4587 — VT Code / Title 8 / Chapter 125 / Section 4587
§ 4587. Filing and approval of contracts
Status: in_force

A medical service corporation that has received a permit from the Commissioner of Financial Regulation under section 4584 of this title shall not thereafter issue a contract to a subscriber or charge a rate that is different from copies of the contracts and rates originally filed with and approved by the Commissioner at the time the permit was issued to the medical service corporation, until the medical service corporation has filed copies of its proposed contracts and rates and they have been approved by the Commissioner or the Green Mountain Care Board established in 18 V.S.A. chapter 220, as appropriate. Prior to approval, there shall be a public comment period pursuant to section 4026 of this title. Each such filing of a contract or rate shall be accompanied by payment to the Commissioner or the Board, as appropriate, of a nonrefundable fee of $150.00. A medical service corporation shall file a plain language summary of rate increases pursuant to section 4026 of this title.