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2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3791o. Requirements of a principle-based valuation

§ 3791o. Requirements of a principle-based valuation
(a) A company must establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the Valuation Manual:
(1) Quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For policies or contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk.
(2) Incorporate assumptions, risk analysis methods and financial models, and management techniques that are consistent with, but not necessarily identical to, those used within the company’s overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods.
(3) Incorporate assumptions that are derived in one of the following manners:
(A) The assumption is prescribed in the Valuation Manual.
(B) For assumptions that are not prescribed, the assumptions shall:
(i) be established using the company’s available experience, to the extent it is relevant and statistically credible; or
(ii) to the extent that company data is not available, relevant, or statistically credible, be established using other relevant, statistically credible experience.
(4) Provide margins for uncertainty including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve.
(b) A company using a principle-based valuation for one or more policies or contracts subject to this section as specified in the Valuation Manual shall:
(1) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the Valuation Manual.
(2) Provide to the Commissioner and its Board of Directors an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. Such controls shall be designed to ensure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made in accordance with the Valuation Manual. The certification shall be based on the controls in place as of the end of the preceding calendar year.
(3) Develop and file with the Commissioner, upon request, a principle-based valuation report that complies with standards prescribed in the Valuation Manual.
(c) A principle-based valuation may include a prescribed formulaic reserve component. (Added 2015, No. 63, § 1, eff. June 17, 2015.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3791p. Experience reporting for policies in force on or after the operative date of the valuation manual

§ 3791p. Experience reporting for policies in force on or after the operative date of the valuation manual
A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the Valuation Manual. (Added 2015, No. 63, § 1.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3791r. Single state exemption

§ 3791r. Single state exemption
(a) The Commissioner may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in Vermont from the requirements of section 3791n of this subchapter provided:
(1) the Commissioner has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing; and
(2) the company computes reserves using assumptions and methods used prior to the operative date of the Valuation Manual in addition to any requirements established by rule adopted by the Commissioner.
(b) For any company granted an exemption under this section, sections 3791c-3791m of this subchapter shall be applicable. With respect to any company applying this exemption, any reference to section 3791n found in sections 3791c-3791m of this subchapter shall not be applicable. (Added 2015, No. 63, § 1, eff. June 17, 2015.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3801. Scope of subchapter—Short title

§ 3801. Scope of subchapter—Short title
This subchapter applies only to group life insurance and may be known and cited as the “Group Life Insurance Law.” (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 1).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3802. Group contracts must meet group requirements

§ 3802. Group contracts must meet group requirements
(a) No life insurance policy shall be delivered or issued for delivery in this State insuring the lives of more than one individual unless to one of the groups as provided for in sections 3803-3810a of this title, and unless in compliance with the other applicable provisions of this subchapter.
(b) Subsection (a) of this section shall not apply to life insurance policies:
(1) insuring only individuals related by blood, civil marriage, or legal adoption; or
(2) insuring only individuals having a common interest through ownership of a business enterprise, or a substantial legal interest or equity therein, and who are actively engaged in the management thereof; or
(3) insuring only individuals otherwise having an insurable interest in each other’s lives. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 2); amended 1993, No. 55, § 11, eff. June 3, 1993; 2009, No. 3, § 12a, eff. Sept. 1, 2009.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3803. Employee groups

§ 3803. Employee groups
The lives of a group of individuals may be insured under a policy issued to an employer, or to the trustees of a fund established by an employer, which employer or trustees shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements:
(1) The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term “employees” shall include the employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors, or partnerships if the business of the employer and of such affiliated corporations, proprietors, or partnerships is under common control through stock ownership, contract, or otherwise. The policy may provide that the term “employees” shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term “employees” shall include retired employees. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation, by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he or she is actively engaged in and devotes a substantial part of his or her time to the conduct of the business of the proprietor or partnership. A policy issued to insure the employees of a public body may provide that the term “employees” shall include elected or appointed officials.
(2) The premium for the policy shall be paid by the policyholder, either wholly from the employer’s funds or funds contributed by him or her, or partly from such funds and partly from funds contributed by the insured employees. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured employees. A policy on which no part of the premium is to be derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
(3) The policy must cover at least two employees at date of issue.
(4) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the employer or trustees. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 3); amended 2005, No. 36, § 7, eff. June 1, 2005; 2009, No. 137 (Adj. Sess.), § 5.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3804. Labor union groups

§ 3804. Labor union groups
The lives of a group of individuals may be insured under a policy issued to a labor union, which shall be deemed the policyholder, to insure members of such union for the benefit of persons other than the union or any of its officials, representatives, or agents, subject to the following requirements:
(1) The members eligible for insurance under the policy shall be all of the members of the union, or all of any class or classes thereof determined by conditions pertaining to their employment or to membership in the union, or both.
(2) The premium for the policy shall be paid by the policyholder, either wholly from the union’s funds, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance. A policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least 75 percent of the then eligible members excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for the insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
(3) The policy must cover at least 10 members at date of issue.
(4) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the union. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 4).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3806. Licensed lenders; charges for insurance

§ 3806. Licensed lenders; charges for insurance
In the case of a debtor under section 2201 et seq. of this title the collection of identifiable charges by the lender shall not be deemed a violation of said chapter if:
(1) The identifiable charge to the debtor is consistent with the actual cost of such insurance to the lender. The identifiable charge to the debtor shall be deemed consistent with the actual cost of the insurance to the lender if the aggregate of all such identifiable charges to all debtors of the same class, determined by conditions pertaining to the debt, is not greater than the premiums charged by the insurer, as computed at the time the charge to the debtor is determined;
(2) The payment of such identifiable charge is optional with the debtor; and
(3) Upon discharge of the debt, whether through prepayment, renewal or refinancing, the debtor is paid a pro rata refund of the identifiable charge paid by the debtor computed according to a schedule to be approved by the Commissioner of Financial Regulation. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 6); amended 1989, No. 225 (Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a); 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3809. Association of employers groups

§ 3809. Association of employers groups
The lives of a group of individuals may be insured under a policy issued to an association of two or more employers, which association shall be deemed the policyholder, to insure employees of such employers for the benefits of persons other than the association or the employers, subject to the following requirements:
(1) The policy may be issued only if:
(A) the association has been in existence for at least five years and was formed for purposes other than obtaining the insurance; and
(B) the participating employers constitute at date of issue at least fifty percent of the total employers eligible to participate, unless the total number of persons covered at date of issue exceeds 600, in which event such participating employers must constitute at least 25 percent of such total employers, in either case omitting from consideration any employer whose employees are already covered for group life insurance.
(2) The persons eligible for insurance under the policy shall be all of the employees of the participating employers, or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term “employees” shall include the individual proprietor or partners whenever a participating employer is an individual proprietor or a partnership. The policy may provide that the term “employees” shall include retired employees. The policy may provide that the term “employees” shall include the employees of the association to which the policy is issued.
(3) The premium for the policy shall be paid by the association, either wholly from the association’s funds or funds contributed by the employers, or partly from such funds and partly from funds contributed by the insured employees. No policy may be issued on which the entire premium payable by the policyholder is to be derived from funds contributed by the insured employees. A policy on which part of the premium so payable is to be derived from funds contributed by the insured employees may be placed in force only if at least 75 percent of the then eligible employees of each participating employer, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premiums so payable is to be derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
(4) The policy must cover at least 100 employees at date of issue.
(5) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the policyholder or the employer. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 9).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3810. Credit union groups

§ 3810. Credit union groups
The lives of a group of individuals may be insured under a policy issued to a credit union or to the trustees of a fund established by one or more credit unions, which credit union or trustees shall be deemed the policyholder to insure members of such credit union or credit unions for the benefit of persons other than the credit union or credit unions or trustees or any of their officials, subject to the following requirements:
(1) The members eligible for insurance shall be all of the members of the credit union or credit unions, or all of any class or classes thereof determined by conditions pertaining to membership in the credit union or credit unions.
(2) The premium for the policy shall be paid by the policyholder, either wholly from the funds of the credit union or credit unions, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance, or wholly from funds contributed by the insured members specifically for their insurance. A policy on which all or a part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least 75 percent of the then eligible members of each credit union, excluding any as to whom evidence of insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
(3) The policy must cover at least 25 members at date of issue.
(4) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the credit union or credit unions. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 10).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3810a. Associations and discretionary groups

§ 3810a. Associations and discretionary groups
(a) The lives of a group of individuals may be insured under a policy issued to an association, or to the trustees of a fund established or maintained for the benefit of members of an association, which association or trustees shall be deemed the policyholder, to insure members of such association for the benefit of persons other than the association, trustees, or their officials, subject to the following requirements:
(1) The association shall have a minimum of 100 members at the time of incorporation or formation if it has been incorporated or formed outside this State, and a minimum of 25 members at the time of incorporation or formation if it has been incorporated or formed in this State.
(2) The association shall have been organized and maintained in good faith for purposes other than that of obtaining insurance.
(3) The association shall have been in active existence for at least five years.
(4) The association shall have articles of association and bylaws which provide that:
(A) the association holds regular meetings not less than annually to further purposes of the members;
(B) the association collects dues or solicits contributions from members; and
(C) the members have voting privileges and representation on the governing board and committees.
(5)(A) The premium for the policy shall be paid from funds contributed by the association, or by members, or by both, or from funds contributed by the covered persons or from both the covered persons and the association members.
(B) Except as provided in subdivision (5)(C) of this subsection, a policy on which no part of the premium is to be derived from funds contributed by the covered persons specifically for the insurance must insure all eligible persons, except those who reject such coverage in writing.
(C) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
(6) The amount of insurance under the policy must be based upon some plan precluding anti-selection either by the members or the association.
(b) The lives of a group of individuals may be insured under a policy issued to any other group determined in the discretion of the Commissioner to be substantially similar to those described in this chapter.
(c) The lives of individuals insured under a group policy authorized by this subchapter may continue to be insured following termination of employment, membership, or other affiliation of the individual with the group under a portability group approved by the Commissioner, provided that the group policy complies with all the applicable requirements of this subchapter. (Added 1993, No. 55, § 9, eff. June 3, 1993; amended 2009, No. 137 (Adj. Sess.), § 7.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3812. Provisions required in group contracts

§ 3812. Provisions required in group contracts
No policy of group life insurance shall be delivered in this State unless it contains in substance the provisions set forth in sections 3813 through 3822 of this title or provisions which in the opinion of the Commissioner are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder; except, however, that:
(1) Sections 3818 to 3822 inclusive shall not apply to policies issued to a creditor to insure debtors of such creditor.
(2) The standard provisions required for individual life insurance policies shall not apply to group life insurance policies.
(3) If the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the commissioner is or are equitable to the insured persons and to the policyholder, but nothing herein shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 12).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3813. Grace period

§ 3813. Grace period
The group life insurance policy shall contain a provision that the policyholder is entitled to a grace period of 31 days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder shall have given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 13).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3814. Incontestability

§ 3814. Incontestability
The group life insurance policy shall contain a provision that the validity of the policy shall not be contested, except for nonpayment of premium, after it has been in force for two years from its date of issue; and that no statement made by any person insured under the policy relating to his or her insurability shall be used in contesting the validity of the insurance with respect to which such statement was made after such insurance has been in force prior to the contest for a period of two years during such person’s lifetime nor unless it is contained in a written instrument signed by him or her. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 14).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3815. Application; statements deemed representations

§ 3815. Application; statements deemed representations
The group life insurance policy shall contain a provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued and become a part of the contract; that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or to his beneficiary. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 15).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3816. Insurability

§ 3816. Insurability
The group life insurance policy shall contain a provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his or her coverage. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 16).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3817. Misstatement of age

§ 3817. Misstatement of age
The group life insurance policy shall contain a provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated, such provision to contain a clear statement of the method of adjustment to be used. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 17).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3818. Payment of benefits

§ 3818. Payment of benefits
The group life insurance policy shall contain a provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, subject to the provisions of the policy in the event there is no designated beneficiary as to all or any part of such sum living at the death of the person insured, and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding $500.00 to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 18).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3819. Certificate

§ 3819. Certificate
The group life insurance policy shall contain a provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he or she is entitled, to whom the insurance benefits are payable and the rights and conditions set forth in sections 3820, 3821, and 3822 of this title. (1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 19).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3820. Conversion on termination of eligibility

§ 3820. Conversion on termination of eligibility
There shall be a provision that if the insurance or any portion of it, on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, such person shall be entitled to have issued to him or her by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, provided application for the individual policy shall be made, and the first premium paid to the insurer, within 31 days after such termination, and provided further that:
(1) The individual policy shall, at the option of such person, be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for.
(2) The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination less the amount of any life insurance for which such person is or becomes eligible under the same or any other group policy within 31 days after such termination, provided that any amount of insurance which shall have matured on or before the date of such termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination.
(3) The premium on the individual policy shall be at the insurer’s then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to his or her age attained on the effective date of the individual policy. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 20).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3821. Conversion on termination of policy

§ 3821. Conversion on termination of policy
The group life insurance policy shall contain a provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured thereunder at the date of such termination whose insurance terminates and who has been so insured for at least five years prior to such termination date shall be entitled to have issued to him or her by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by section 3820 of this title except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of:
(1) the amount of the person’s life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which he or she is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after such termination; or
(2) $2,000.00. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 21).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3822. Death pending conversion

§ 3822. Death pending conversion
The group life insurance policy shall contain a provision that if a person insured under the policy dies during the period within which he or she would have been entitled to have an individual policy issued to him or her in accordance with section 3820 or 3821 of this title and before such an individual policy shall have become effective, the amount of life insurance which he or she would have been entitled to have issued to him or her under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 22).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3823. Notice as to conversion right

§ 3823. Notice as to conversion right
If any individual insured under a group life insurance policy hereafter delivered in this State becomes entitled under the terms of such policy to have an individual policy of life insurance issued to him or her without evidence of insurability, subject to making of application and payment of the first premium within the period specified in such policy, and if such individual is not given notice of the existence of such right at least 15 days prior to the expiration date of such period, then, in such event the individual shall have an additional period within which to exercise such right, but nothing herein contained shall be construed to continue any insurance beyond the period provided in such policy. This additional period shall expire 15 days next after the individual is given such notice but in no event shall such additional period extend beyond 60 days next after the expiration date of the period provided in such policy. Written notice presented to the individual or mailed by the policyholder to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder shall constitute notice for the purpose of this section. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 23).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3824. Readjustment of premium

§ 3824. Readjustment of premium
Any group life insurance contract may provide for a readjustment of the premium rate based upon the experience thereunder. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 24).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3825. Application of dividends, rate reductions

§ 3825. Application of dividends, rate reductions
If a policy dividend is hereafter declared or a reduction in rate is hereafter made or continued for the first or any subsequent year of insurance under any policy of group life insurance heretofore or hereafter issued to any policyholder, the excess, if any, of the aggregate dividends or rate reductions under such policy and all other group insurance policies of the policyholder over the aggregate expenditure for insurance under such policies made from funds contributed by the policyholder, or by an employer of insured persons, or by a union or association to which the insured persons belong, including expenditures made in connection with administration of such policies, shall be applied by the policyholder for the sole benefit of insured employees or members. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 25).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3839. Reporting requirements and privacy

§ 3839. Reporting requirements and privacy
(a) Each life settlement provider shall file with the Commissioner on or before March 1 of each year an annual statement containing such information as the Commissioner may prescribe by rule or order. Information relating to life settlement transactions shall be limited to only those transactions where the policy owner is a resident of this State. Upon proper request by the filer, the Commissioner shall keep confidential trade secret information exempt from public inspection and copying under 1 V.S.A. § 317(c)(9). The annual statement shall not contain individually identifiable life settlement transaction information, but such information shall be provided to the Commissioner pursuant to section 3840 of this title. If available to the provider because of the provider’s business relationship or affiliation with one or more life settlement purchasers, the annual statement shall also include such information as the Commissioner may prescribe by rule or by order concerning life settlement purchase agreements or similar investment contracts entered into by residents of this State.
(b) A life settlement provider, life settlement broker, insurance company, life insurance producer, information bureau, rating agency or company, or any other person with actual knowledge of an insured’s or a policy owner’s identity shall be subject to the department’s Regulation No. IH-2001-I “Privacy of Consumer Financial and Health Information,” as amended. (Added 2009, No. 53, § 1, eff. Jan. 1, 2010; amended 2015, No. 29, § 8.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3840. Investigations and examinations

§ 3840. Investigations and examinations
(a) The Commissioner, in addition to all powers granted pursuant to chapter 1 of this title, may examine the business and affairs of any licensee or applicant for a license whenever he or she deems it to be prudent for the protection of policyholders or the public. The Commissioner shall have the authority to examine any person and to order the production of any records, books, files or other information reasonably necessary to ascertain whether the licensee or applicant is acting or has acted in violation of the law or otherwise contrary to the interests of the public. The expenses incurred in conducting any examination shall be paid by the licensee or applicant.
(b) A person required to be licensed by this subchapter shall for five years following the death of the insured retain copies of all:
(1) proposed, offered, or executed contracts, purchase agreements, underwriting documents, policy forms, and applications from the date of the proposal, offer, or execution of the contract or purchase agreement, whichever is later;
(2) all checks, drafts, or other evidence and documentation related to the payment, transfer, deposit, or release of funds from the date of the transaction; and
(3) all other records and documents related to the requirements of this subchapter.
(c) Except as otherwise provided in this subchapter, all examination reports, working papers, recorded information, documents and copies thereof produced by, obtained by, or disclosed to the Commissioner or any other person in the course of an examination or investigation made under this subchapter or in the course of analysis or investigation by the Commissioner of the financial condition or market conduct of a licensee shall be confidential by law and privileged, shall not be subject to disclosure as a public record under 1 V.S.A. § 317, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as part of the Commissioner’s official duties.
(d) The expense incurred in conducting any examination shall be paid by the licensee or applicant. (Added 2009, No. 53, § 1, eff. Jan. 1, 2010.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3842. Disclosure to insurer

§ 3842. Disclosure to insurer
Thirty days prior to the execution of a life settlement contract or the execution or other affirmation of an agreement or arrangement to enter into a life settlement contract, a life settlement provider shall provide notice to the insurer that issued or has assumed the policy, provided the contract, agreement or arrangement is executed or otherwise affirmed prior to, or during the first five years after issuance of a policy. The notice shall contain information identifying the policy and the policy owner, if applicable, and a copy of the proposed life settlement contract. (Added 2009, No. 53, § 1, eff. Jan. 1, 2010.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3845. Prohibited practices and conflicts of interest

§ 3845. Prohibited practices and conflicts of interest
(a) With respect to any life settlement contract or insurance policy, no life settlement broker shall solicit an offer from, effectuate a life settlement with, or make a sale to any life settlement provider, financing entity, or related provider trust that is controlling, controlled by, or under common control with such life settlement broker.
(b) No broker shall have a financial relationship or affiliation with a life settlement provider unless the broker fully discloses such relationship or affiliation. A broker shall not participate in or form a financial arrangement or affiliation with a life settlement provider if such arrangement or affiliation conflicts with the broker’s fiduciary duty to the policy owner.
(c) With respect to any life settlement contract or insurance policy, no life settlement provider shall knowingly enter into a life settlement contract with a policy owner if, in connection with such life settlement contract, anything of value will be paid to a life settlement broker that is controlling, controlled by, or under common control with such life settlement provider, the life settlement purchaser, life settlement investment agent, a financing entity, or a related provider trust that is involved in such life settlement contract.
(d) A violation of subsection (a), (b), or (c) of this section shall be deemed a fraudulent life settlement act.
(e) No life settlement provider shall enter into a life settlement contract unless the life settlement promotional, advertising, and marketing materials, as may be prescribed by regulation, have been filed with the Commissioner. In no event shall any marketing materials expressly reference that the insurance is “free” for any period of time. The inclusion of any reference in the marketing materials that would cause a policy owner to reasonably believe that the insurance is free for any period of time shall be considered a violation of this subchapter.
(f) No life insurance producer, insurance company, life settlement broker, or life settlement provider shall make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless provided in the policy. (Added 2009, No. 53, § 1, eff. Jan. 1, 2010.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3848. Civil remedies, penalties, and enforcement

§ 3848. Civil remedies, penalties, and enforcement
In addition to any other civil and administrative remedies, penalties, and enforcement authority provided for by law:
(1) A violation of this subchapter or of a rule or order adopted or issued under this subchapter, including the commission of a fraudulent life settlement act, shall constitute an unfair trade practice under chapter 129 of this title (Insurance Trade Practices) and shall be subject to the remedies, penalties, and enforcement authority provided for in chapter 129 of this title. The Commissioner may report any violation of this subchapter to the Attorney General, who may prosecute therefor if he or she deems desirable.
(2) The Commissioner may issue a cease and desist order upon a person that violates any provision of this subchapter, any rule or order adopted or issued by the Commissioner, or any written agreement with a licensee entered into with the Commissioner.
(3) When the Commissioner finds that an activity in violation of this subchapter or of a rule or order adopted or issued by the Commissioner presents an immediate danger to the public that requires an immediate final order, the Commissioner may issue an emergency cease and desist order reciting with particularity the facts underlying the findings. The emergency cease and desist order is effective immediately upon service of a copy of the order on the respondent and remains effective for 90 days. If the Commissioner begins nonemergency cease and desist proceedings, the emergency cease and desist order remains effective absent a petition by the respondent and an order by a Superior Court of Washington County vacating the Commissioner’s emergency order.
(4) A Commissioner’s order under this subsection may require a person found to be in violation of this subchapter to make restitution to persons aggrieved by violations of this subchapter or to take further actions necessary to remedy violations of this subchapter. (Added 2009, No. 53, § 1, eff. Jan. 1, 2010.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3849. Adoption of rules

§ 3849. Adoption of rules
The Commissioner may:
(1) Adopt rules necessary to carry out the purposes of this subchapter.
(2) Establish standards for evaluating reasonableness of payments under life settlement contracts for persons who are terminally or chronically ill. This authority includes the regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise, or bequest of a benefit under a life insurance policy insuring the life of a person who is chronically or terminally ill.
(3) Adopt rules governing the relationships and responsibilities of insurers, life settlement providers, and life settlement brokers during life settlement transaction. (Added 2009, No. 53, § 1, eff. Jan. 1, 2010.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3856. Required contents of policy

§ 3856. Required contents of policy
Any contract providing benefits payable in variable amounts delivered or issued for delivery in this State shall contain a statement of the essential features of the procedures to be followed by the insurer in determining the dollar amount of such variable benefits. Any such contract under which the benefits vary to reflect investment experience, including a group contract and any certificate in evidence of variable benefits issued thereunder, shall state that such dollar amount will so vary and shall contain on its first page a statement to the effect that the benefits thereunder are on a variable basis. (Added 1971, No. 106, § 2, eff. April 22, 1971.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3857. Licensing

§ 3857. Licensing
(a) No company shall deliver or issue for delivery within this State variable contracts unless it is licensed or organized to do a life insurance or annuity business in this State, and the Commissioner is satisfied that its condition or method of operation in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this state. In this connection, the Commissioner shall consider among other things:
(1) the history and financial condition of the company;
(2) the character, responsibility and fitness of the officers and directors of the company; and
(3) the law and regulation under which the company is authorized in the state of domicile to issue variable contracts.
(b) If the company is a subsidiary of an admitted life insurer, or affiliated with such insurer through common management or ownership, it may be deemed by the Commissioner to have met the provisions of this section if either it or the parent or the affiliated insurer meets the requirements hereof. (Added 1971, No. 106, § 3, eff. April 22, 1971.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3858. Powers of Commissioner

§ 3858. Powers of Commissioner
Notwithstanding any other provision of law, the Commissioner has sole authority to regulate the issuance and sale of variable contracts and to issue such reasonable rules and regulations as may be appropriate to carry out the purposes and provisions of this subchapter. (Added 1971, No. 106, § 4, eff. April 22, 1971.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3859. Grace; reinstatement; nonforfeiture

§ 3859. Grace; reinstatement; nonforfeiture
(a) Except for subdivisions 3731(2), (7), (8), and (9), sections 3760-3773, inclusive, section 3813 of this title in the case of a variable life insurance policy, and section 3750 of this title in the case of a variable annuity contract, and except as otherwise provided in this subchapter, all pertinent provisions of this title apply to separate accounts and contracts relating thereto. Any individual variable life insurance contract delivered or issued for delivery in this State shall contain grace, reinstatement, and nonforfeiture provisions appropriate to such a contract. Any group variable life insurance contract delivered or issued for delivery in this State shall contain grace provisions appropriate to such a contract.
(b) The reserve liability for variable contracts shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees. (Added 1971, No. 106, § 5, eff. April 22, 1971; amended 1981, No. 43, § 11, eff. April 21, 1981; 2019, No. 103 (Adj. Sess.), § 21.)