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2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048a. Applicable law

§ 6048a. Applicable law
(a) A special purpose financial insurance company shall be subject to the provisions of this subchapter and to the provisions of subchapter 1 of this chapter. In the event of any conflict between the provisions of this subchapter and the provisions of subchapter 1 of this chapter, the provisions of this subchapter shall control.
(b) A special purpose financial insurance company shall be subject to all applicable rules adopted pursuant to section 6015 of this chapter that are in effect as of July 1, 2007 and that are adopted after July 1, 2007.
(c) The Commissioner may, by order, exempt a special purpose financial insurance company from any provision of this chapter or from any rule adopted pursuant to section 6015 of this chapter if the Commissioner determines such provision to be inappropriate based on the special purpose financial insurance company’s plan of operation. (Added 2007, No. 49, § 17; amended 2013, No. 29, § 52, eff. May 13, 2013.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048b. Existing licenses

§ 6048b. Existing licenses
Except as otherwise determined by the Commissioner, a captive insurance company that has been licensed by the Commissioner pursuant to this chapter as of July 1, 2007 and that is engaged in or that will be engaged in an insurance securitization shall be subject to the provisions of this subchapter as a special purpose financial insurance company. The Commissioner may require such captive insurance company to take any action that the Commissioner determines is reasonably necessary to bring such captive insurance company into compliance with the provisions of this subchapter. The Commissioner may issue an order described in subsection 6048d(b) of this title with respect to such captive insurance company. (Added 2007, No. 49, § 17; amended 2013, No. 29, § 53.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048e. Changes in plan of operation; voluntary dissolution or cessation of business

§ 6048e. Changes in plan of operation; voluntary dissolution or cessation of business
(a) Any change in the special purpose financial insurance company’s plan of operation shall require prior approval of the Commissioner.
(b) Any transaction or series of transactions shall be subject to the prior approval of the Commissioner if such transaction or series of transactions:
(1) is undertaken to dissolve a special purpose financial insurance company; or
(2) results in the termination of all or any part of a special purpose financial insurance company’s business; but no prior approval of the Commissioner shall be required for any transaction or series of transactions described in this subdivision (2) if such transaction or series of transactions is done in accordance with a document or agreement described in the special purpose financial insurance company’s plan of operation and if the Commissioner is notified in advance of such transaction or series of transactions.
(c) A special purpose financial insurance company shall notify the Commissioner in advance of any change in the legal ownership of any security issued by the special purpose financial insurance company. (Added 2007, No. 49, § 17; amended 2013, No. 29, § 56, eff. May 13, 2013.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048f. Formation

§ 6048f. Formation
(a) A special purpose financial insurance company may be incorporated as a stock insurer with its capital divided into shares and held by its stockholders, or it may be organized as a manager-managed limited liability company.
(b) A special purpose financial insurance company’s organizational documents shall limit the special purpose financial insurance company’s authority to transact the business of insurance or reinsurance to those activities that the special purpose financial insurance company conducts to accomplish its purposes as expressed in this subchapter. (Added 2007, No. 49, § 17; amended 2013, No. 29, § 57.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048g. Minimum capital and surplus

§ 6048g. Minimum capital and surplus
A special purpose financial insurance company shall not be issued a license unless it shall possess and thereafter maintain unimpaired paid-in capital and surplus of not less than $5,000,000.00. (Added 2007, No. 49, § 17; amended 2013, No. 29, § 58.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048h. Securities

§ 6048h. Securities
(a) A special purpose financial insurance company may:
(1) subject to the prior approval of the Commissioner, account for the proceeds of a surplus note issued by the special purpose financial insurance company as surplus; and
(2) submit for prior approval of the Commissioner periodic written requests for authorization to make payments of interest on and repayments of principal of surplus notes and other debt obligations issued by the special purpose financial insurance company, provided that the Commissioner shall not approve such payment if the Commissioner determines that such payment would jeopardize the ability of the special purpose financial insurance company or any other person to fulfill his or her respective obligations pursuant to the special purpose financial insurance company securitization agreements, the reinsurance contract, or any related transaction. In lieu of approval of periodic written requests for authorization to make payments of interest on and repayments of principal of surplus notes and other debt obligations issued by the special purpose financial insurance company, the Commissioner may approve a formula or plan, which shall be included in the special purpose financial insurance company’s plan of operation as amended from time to time, for payment of interest, principal, or both with respect to such surplus notes and debt obligations.
(b) In addition to the provisions of section 6005 of this chapter, no dividend or distribution may be declared or paid by a special purpose financial insurance company if such dividend or distribution would jeopardize the ability of the special purpose financial insurance company or any other person to fulfill the company’s or other person’s respective obligations pursuant to the special purpose financial insurance company securitization agreements, the reinsurance contract, or any related transaction.
(c) A special purpose financial insurance company security shall not be subject to regulation as an insurance or reinsurance contract. An investor in such a security or a holder of such a security shall not be considered to be transacting the business of insurance in this State solely by reason of having an interest in the security. The underwriter’s placement or selling agents and their partners, commissioners, officers, members, managers, employees, agents, representatives, and advisors involved in an insurance securitization by a special purpose financial insurance company shall not be considered to be insurance producers or brokers or to be conducting business as an insurance or reinsurance company or as an insurance agency, brokerage, intermediary, advisory, or consulting business solely by virtue of their underwriting activities in connection with such securitization. (Added 2007, No. 49, § 17; amended 2013, No. 29, § 59, eff. May 13, 2013.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048j. Disposition of assets; investments

§ 6048j. Disposition of assets; investments
(a) The assets of a special purpose financial insurance company shall be preserved and administered by or on behalf of the special purpose financial insurance company to satisfy the liabilities and obligations of the special purpose financial insurance company incident to the reinsurance contract, the insurance securitization, and other related agreements.
(b) In the special purpose financial insurance company securitization, the security offering memorandum or other document issued to prospective investors regarding the offer and sale of a surplus note or other security shall include a disclosure that all or part of the proceeds of such insurance securitization will be used to fund the special purpose financial insurance company’s obligations to the ceding insurer.
(c) A special purpose financial insurance company shall not be subject to any restriction on investments other than the following:
(1) a special purpose financial insurance company shall not make a loan to any person other than as permitted under its plan of operation or as otherwise approved in advance by the Commissioner; and
(2) the Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the special purpose financial insurance company unless the investment is otherwise approved in its plan of operation or in an order issued to the special purpose financial insurance company pursuant to subsection 6048d(b) of this chapter, as either is amended from time to time. (Added 2007, No. 49, § 17; amended 2013, No. 29, § 61, eff. May 13, 2013.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048k. Annual report; books and records

§ 6048k. Annual report; books and records
(a) For purposes of subsection 6007(b) of this chapter:
(1) the Commissioner shall, by rule or order, establish the form and content of the annual report to be filed by a special purpose financial insurance company; and
(2) a special purpose financial insurance company shall report using statutory accounting principles, unless the Commissioner requires, approves, or accepts the use of generally accepted accounting principles or other comprehensive basis of accounting, in each case with any appropriate or necessary modifications or adaptations required or approved or accepted by the Commissioner and as supplemented by additional information required by the Commissioner.
(b) A special purpose financial insurance company may make written application to file its annual report on a fiscal-year basis. If an alternative reporting date is granted, the Commissioner shall establish the due date and content of any filing required by the special purpose financial insurance company in addition to its annual report.
(c) Unless otherwise approved in advance by the Commissioner, a special purpose financial insurance company shall maintain its books, records, documents, accounts, vouchers, and agreements in this State. A special purpose financial insurance company shall make its books, records, documents, accounts, vouchers, and agreements available for inspection by the Commissioner at any time. A special purpose financial insurance company shall keep its books and records in such manner that its financial condition, affairs, and operations can be readily ascertained and so that the Commissioner may readily verify its financial statements and determine its compliance with this chapter.
(d) Unless otherwise approved in advance by the Commissioner, all books, records, documents, accounts, vouchers, and agreements shall be preserved and kept available in this State for the purpose of examination and inspection and until such time as the Commissioner approves the destruction or other disposition of such books, records, documents, accounts, vouchers, and agreements. If the Commissioner approves the keeping of the items listed in this subsection outside this State, the special purpose financial insurance company shall maintain in this State a complete and true copy of each such item. Books, records, documents, accounts, vouchers, and agreements may be photographed, reproduced on film, or stored and reproduced electronically. (Added 2007, No. 49, § 17; amended 2009, No. 42, § 27, eff. May 27, 2009; 2013, No. 29, § 62, eff. May 13, 2013; 2023, No. 12, § 4, eff. May 8, 2023.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6048l. License suspension and revocation

§ 6048l. License suspension and revocation
(a) The Commissioner shall notify a special purpose financial insurance company not less than 30 days before suspending or revoking its license pursuant to section 6009 of this chapter, which notice shall state the basis for such suspension or revocation. The special purpose financial insurance company shall be afforded the opportunity for a hearing pursuant to the provisions of the Vermont Administrative Procedure Act, 3 V.S.A. chapter 25.
(b) Notwithstanding subsection (a) of this section and 3 V.S.A. § 814(c), no prior notice or hearing shall be required if the grounds for suspension or revocation of a special purpose financial insurance company’s license pursuant to section 6009 of this chapter relate primarily to the financial condition or soundness of the special purpose financial insurance company or to a deficiency in its assets.
(c) For purposes of this subchapter, reference to section 6004 in subdivision 6009(a)(2) of this title shall be construed also as a reference to section 6048g of this subchapter. (Added 2007, No. 49, § 17; amended 2013, No. 29, § 63, eff. May 13, 2013.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049a. Applicable law

§ 6049a. Applicable law
(a) An affiliated reinsurance company shall be subject to the provisions of this subchapter and to the provisions of subchapter 1 of this chapter. In the event of any conflict between the provisions of this subchapter and the provisions of subchapter 1 of this chapter, the provisions of this subchapter shall control.
(b) An affiliated reinsurance company shall be subject to all applicable rules adopted pursuant to section 6015 of this chapter that are in effect as of July 1, 2018 and those that are adopted after July 1, 2018. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049b. Definitions

§ 6049b. Definitions
As used in this subchapter:
(1) “Affiliated reinsurance company” means a company licensed by the Commissioner pursuant to this subchapter to reinsure risks ceded by one or more ceding insurers that are affiliated companies. Subject to the prior approval of the Commissioner, not more than 10 percent of the risks reinsured may be ceded by ceding insurers that are not affiliated companies.
(2) “Ceding insurer” means an insurance company approved by the Commissioner and licensed or otherwise authorized to transact the business of insurance or reinsurance in its state or country of domicile, which cedes risk to an affiliated reinsurance company pursuant to a reinsurance contract.
(3) “Organizational documents” means the affiliated reinsurance company’s articles of incorporation and bylaws and such other documents as shall be approved by the Commissioner.
(4) “Reinsurance contract” means a contract between an affiliated reinsurance company and a ceding insurer pursuant to which the affiliated reinsurance company agrees to provide reinsurance to the ceding insurer. (Added 2017, No. 134 (Adj. Sess.), § 10; amended 2019, No. 110 (Adj. Sess.), § 11A, eff. June 15, 2020.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049c. Licensing; authority

§ 6049c. Licensing; authority
(a) An affiliated reinsurance company shall only reinsure the risks of a ceding insurer. An affiliated reinsurance company may cede the risks assumed under a reinsurance contract to another reinsurer, subject to the prior approval of the Commissioner.
(b) In conjunction with the issuance of a license to an affiliated reinsurance company, the Commissioner may issue an order that includes any provisions, terms, and conditions regarding the organization, licensing, and operation of the affiliated reinsurance company that are deemed appropriate by the Commissioner and that are not inconsistent with the provisions of this chapter.
(c) To qualify for a license, an affiliated reinsurance company shall be subject, in addition to the requirements of subsection 6002(c) of this chapter, to the following:
(1) The information submitted to the Commissioner pursuant to subdivision 6002(c)(1)(B) of this chapter shall include:
(A) the source and form of the affiliated reinsurance company’s capital and surplus;
(B) the investment policy of the affiliated reinsurance company, which shall provide for a diversified investment portfolio both as to type and issue and shall include a requirement for liquidity and for the reasonable preservation, administration, and management of such assets with respect to the risks associated with any reinsurance transactions.
(2) The application shall include copies of all agreements and documentation, including reinsurance agreements, described in subdivision (1) of this subsection (c) unless otherwise approved by the Commissioner and any other statements or documents required by the Commissioner to evaluate the affiliated reinsurance company’s application for licensure.
(d) Subdivision 6002(c)(3) of this chapter shall apply to all information submitted pursuant to subsection (c) of this section and to any order issued to the affiliated reinsurance company pursuant to subsection (b) of this section. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049d. Formation

§ 6049d. Formation
(a) An affiliated reinsurance company may be incorporated as a stock insurer with its capital divided into shares, or in such other organizational form as may be approved by the Commissioner.
(b) An affiliated reinsurance company’s organizational documents shall limit the affiliated reinsurance company’s authority to the transaction of the business of insurance or reinsurance and to those activities that the affiliated reinsurance company conducts to accomplish its purposes as expressed in this subchapter. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049e. Minimum capital and surplus

§ 6049e. Minimum capital and surplus
An affiliated reinsurance company shall not be issued a license unless it possesses and thereafter maintains unimpaired paid-in capital and surplus of not less than $5,000,000.00. The Commissioner may prescribe additional capital and surplus based upon the type, volume, and nature of reinsurance business transacted. Except as otherwise provided in this section, the provisions of chapter 159 of this title, Risk Based Capital for Insurers, shall apply in full to an affiliated reinsurance company. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049f. Permitted reinsurance

§ 6049f. Permitted reinsurance
(a) An affiliated reinsurance company shall only reinsure the risks of a ceding insurer, pursuant to a reinsurance contract. An affiliated reinsurance company shall not issue a contract of insurance or a contract for assumption of risk or indemnification of loss other than such reinsurance contract.
(b) The reinsurance contract shall contain all provisions reasonably required or approved by the Commissioner, which requirements shall take into account the laws applicable to the ceding insurer regarding the ceding insurer’s taking credit for the reinsurance provided under such reinsurance contract.
(c) An affiliated reinsurance company may cede risks assumed through a reinsurance contract to one or more reinsurers through the purchase of reinsurance, subject to the prior approval of the Commissioner. Except as otherwise provided in this section, the provisions of chapter 101, subchapter 10 of this title, reinsurance of risks, shall apply in full to an affiliated reinsurance company.
(d) Unless otherwise approved in advance by the Commissioner, a reinsurance contract shall not contain any provision for payment by the affiliated reinsurance company in discharge of its obligations under the reinsurance contract to any person other than the ceding insurer or any receiver of the ceding insurer.
(e) An affiliated reinsurance company shall notify the Commissioner immediately of any action by a ceding insurer or any other person to foreclose on or otherwise take possession of collateral provided by the affiliated reinsurance company to secure any obligation of the affiliated reinsurance company. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049g. Disposition of assets; investments

§ 6049g. Disposition of assets; investments
(a) The assets of an affiliated reinsurance company shall be preserved and administered by or on behalf of the affiliated reinsurance company to satisfy the liabilities and obligations of the affiliated reinsurance company incident to the reinsurance contract and other related agreements.
(b) The Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the affiliated reinsurance company unless the investment is otherwise approved in its plan of operation or in an order issued to the affiliated reinsurance company pursuant to subsection 6049c of this chapter. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049h. Annual report; books and records

§ 6049h. Annual report; books and records
(a) For the purposes of subsection 6007(b) of this chapter:
(1) Each affiliated reinsurance company shall file its report in the form required by subsection 3561(a) of this title, and each affiliated reinsurance company shall comply with the requirements set forth in section 3569 of this title.
(2) An affiliated reinsurance company shall report using statutory accounting principles in accordance with the National Association of Insurance Commissioner’s Accounting Practices and Procedures Manual. Reporting shall be in such general form and context, as approved by, and shall contain any other information required by, the National Association of Insurance Commissioners, with any useful or necessary modifications or adaptions thereof required or approved or accepted by the Commissioner for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the Commissioner.
(b) Unless otherwise approved in advance by the Commissioner, an affiliated reinsurance company shall maintain its books, records, documents, accounts, vouchers, and agreements in this State. An affiliated reinsurance company shall make its books, records, documents, accounts, vouchers, and agreements available for inspection by the Commissioner at any time. An affiliated reinsurance company shall keep its books and records in such manner that its financial condition, affairs, and operations can be readily ascertained and so that the Commissioner may readily verify its financial statements and determine its compliance with this chapter.
(c) Unless otherwise approved in advance by the Commissioner, all books, records, documents, accounts, vouchers, and agreements shall be preserved and kept available in this State for the purpose of examination and inspection and until such time as the Commissioner approves the destruction or other disposition of such books, records, documents, accounts, vouchers, and agreements. If the Commissioner approves the keeping outside this State of the items listed in this subsection, the affiliated reinsurance company shall maintain in this State a complete and true copy of each such item. Books, records, documents, accounts, vouchers, and agreements may be photographed, reproduced on film, or stored and reproduced electronically.
(d) The provisions of sections 3578a (annual financial reporting) and 3579 (qualified accountants) of this title shall apply in full to an affiliated reinsurance company. (Added 2017, No. 134 (Adj. Sess.), § 10; amended 2019, No. 3, § 8, eff. April 18, 2019; 2023, No. 12, § 5, eff. May 8, 2023.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049i. Insurance holding company systems

§ 6049i. Insurance holding company systems
Except as otherwise provided in this section, the provisions of chapter 101, subchapter 13 of this title shall apply in full to an affiliated reinsurance company. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049j. Corporate governance; disclosure

§ 6049j. Corporate governance; disclosure
Except as otherwise provided in this section, the provisions of section 3316 of this title shall apply in full to an affiliated reinsurance company. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049k. Own risk and solvency assessment

§ 6049k. Own risk and solvency assessment
Except as otherwise provided in this section, the provisions of chapter 101, subchapter 7A (own risk and solvency assessment) of this title shall apply in full to an affiliated reinsurance company. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6049l. Requirements for actuarial opinions

§ 6049l. Requirements for actuarial opinions
Except as otherwise provided in this section, the provisions of chapter 101, section 3577 (requirements for actuarial opinions) of this title shall apply in full to an affiliated reinsurance company. (Added 2017, No. 134 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6050. Purpose

§ 6050. Purpose
The purpose of this chapter is to regulate the formation and operation of risk retention groups and purchasing groups in this State formed pursuant to the provisions of the federal Liability Risk Retention Act of 1986 (“RRA 1986”), to the extent permitted by such law. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6051. Definitions

§ 6051. Definitions
As used in this chapter:
(1) “Commissioner” means the Commissioner of Financial Regulation of this State, or the commissioner, director, or superintendent of insurance in any other state.
(2) “Domicile,” for purposes of determining the state in which a purchasing group is domiciled, means:
(A) for a corporation, the state in which the purchasing group is incorporated; and
(B) for an unincorporated entity, the state of its principal place of business.
(3) “Hazardous financial condition” shall have the same meaning as in 15 U.S.C. § 3901(a)(7).
(4) “Insurance” shall have the same meaning as in 15 U.S.C. § 3901(a)(1).
(5) “Liability” shall have the same meaning as in 15 U.S.C. § 3901(a)(2).
(6) “Personal risk liability” shall have the same meaning as in 15 U.S.C. § 3901(a)(3).
(7) “Plan of operation and feasibility study” means an analysis that presents the expected activities and results of a risk retention group as required by chapter 141 of this title.
(8) “Product liability” means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage, including damages resulting from the loss of use of property, arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of such a person when the incident giving rise to the claim occurred.
(9) “Purchasing group” has the same meaning as in 15 U.S.C. § 3901(a)(5).
(10) “Risk retention group” shall have the same meaning as in 15 U.S.C. § 3901(a)(4).
(11) “State” means any state of the United States or the District of Columbia. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992; amended 1995, No. 180 (Adj. Sess.), § 38; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6054. Compulsory associations

§ 6054. Compulsory associations
(a) No risk retention group shall be required or permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this State, nor shall any risk retention group, or its insureds or claimants against its insureds, receive any benefit from any such fund for claims arising under the insurance policies issued by such risk retention group.
(b) When a purchasing group obtains insurance covering its members’ risks from an insurer not authorized in this State or from a risk retention group, no such risks, wherever resident or located, shall be covered by any insurance guaranty fund or similar mechanism in this State.
(c) When a purchasing group obtains insurance covering its members’ risks from a licensed insurer, only risks resident or located in this State shall be covered by the State Guaranty Fund subject to chapter 112 of this title. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6055. Purchasing groups; exemption from certain laws

§ 6055. Purchasing groups; exemption from certain laws
A purchasing group and its insurer or insurers shall be subject to all applicable laws of this State, except that a purchasing group and its insurer or insurers shall be exempt from State laws as provided in 15 U.S.C. § 3903(a)(1)-(a)(8). (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6056. Notice and registration requirements of purchasing groups

§ 6056. Notice and registration requirements of purchasing groups
(a) A purchasing group intending to do business in this State shall, prior to doing business, furnish notice to the Commissioner that shall:
(1) be as provided in 15 U.S.C. § 3903(d);
(2) identify all other states in which the group intends to do business;
(3) specify the method by which, and the person or persons, if any, through whom insurance will be offered to its members whose risks are resident or located in this State; and
(4) provide such other information as may be required by the Commissioner to verify that the purchasing group is qualified under subdivision 6051(9) of this title.
(b) The purchasing group shall register with and designate the Commissioner as its agent solely for the purpose of receiving service of legal documents or process, except for any groups exempted under 15 U.S.C. § 3903(e). Service shall be effected in the manner provided in section 3383 of this title.
(c) Each purchasing group that is required to give notice pursuant to subsection (a) of this section shall also furnish such information as may be required by the Commissioner to:
(1) verify that the entity qualifies as a purchasing group;
(2) determine where the purchasing group is located; and
(3) determine appropriate tax treatment under section 6058 of this title.
(d) Any purchasing group that was doing business in this State prior to the enactment of this chapter shall, within 30 days after December 31, 1992, furnish notice to the Commissioner pursuant to the provisions of subsection (a) of this section and furnish such information as may be required pursuant to subsections (b) and (c) of this section. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992; amended 2021, No. 25, § 30, eff. May 12, 2021.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6057. Restrictions on insurance purchased by purchasing groups

§ 6057. Restrictions on insurance purchased by purchasing groups
(a) A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of such state.
(b) A purchasing group that obtains liability insurance from an insurer not admitted in this State or a risk retention group shall inform each of the members of such group that have a risk resident or located in this State that such risk is not protected by an insurance insolvency guaranty fund in this State in writing that such risk retention group or such insurer may not be subject to all insurance laws and regulations of this State.
(c) No purchasing group may purchase insurance providing for a deductible or self-insured retention applicable to the group as a whole; however, coverage may provide for a deductible or self-insured retention applicable to individual members.
(d) Purchases of insurance by purchasing groups are subject to the same standards regarding aggregate limits that are applicable to all purchases of group insurance. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6058. Purchasing group taxation

§ 6058. Purchasing group taxation
Premium taxes and taxes on premiums paid for coverage of risks resident or located in this State by a purchasing group or any members of the purchasing groups shall be:
(1) imposed at the same rate and subject to the same interest, fines, and penalties as that applicable to premium taxes and taxes on premiums paid for similar coverage from a similar insurance source by other insureds; and
(2) paid first by such insurance source, and if not by such source, by the agent or broker for the purchasing group, and if not by such agent or broker, then by the purchasing group, and if not by such purchasing group, then by each of its members. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6059. Administrative and procedural authority regarding risk retention groups and purchasing groups

§ 6059. Administrative and procedural authority regarding risk retention groups and purchasing groups
The Commissioner is authorized to make use of any of the powers established under this title to enforce the laws of this State not specifically preempted by the Risk Retention Act of 1986, including the Commissioner’s administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, impose penalties, and seek injunctive relief. With regard to any investigation, administrative proceedings, or litigation, the Commissioner can rely on the procedural laws of this State. The injunctive authority of the Commissioner, in regard to risk retention groups, is restricted by the requirement that any injunction be issued by a court of competent jurisdiction. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6060. Duties of agent or brokers to obtain license

§ 6060. Duties of agent or brokers to obtain license
(a) Purchasing groups.
(1) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance in this State for a purchasing group from an authorized insurer or a risk retention group chartered in a state unless such person, firm, association, or corporation is licensed as an insurance agent or broker in accordance with chapter 131 of this title.
(2) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance coverage in this State for any member of a purchasing group under a purchasing group’s policy unless such person, firm, association, or corporation is licensed as an insurance agent or broker in accordance with chapter 131 of this title.
(3) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance from an insurer not authorized to do business in this State on behalf of a purchasing group located in this State unless such person, firm, association, or corporation is licensed as a surplus lines broker or excess line broker in accordance with chapter 131 of this title.
(b) For purposes of acting as an agent or broker for a purchasing group pursuant to subsection (a) of this section, the requirement of residence in this State shall not apply.
(c) Every person, firm, association, or corporation licensed pursuant to the provisions of chapter 131 of this title, on business written through a purchasing group, shall inform each prospective insured of the provisions of the notice required by subsection 6057(c) of this title. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142 - Risk Retention Groups and Purchasing Groups › § 6061. Binding effect of orders issued in U.S. District Court

§ 6061. Binding effect of orders issued in U.S. District Court
An order issued by any District Court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating in any state, or in all states or in any territory or possession of the United States, shall be enforceable in the courts of this State, upon a finding that such a group is in hazardous financial or financially impaired condition. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142A - Risk Retention Group Managing General Agents, Reinsurance Intermediaries, and Producer Controlled Insurers › § 6070. Application of chapter

§ 6070. Application of chapter
(a) This chapter applies to risk retention groups domiciled in this State operating under the provisions of chapters 141 and 142 of this title and to persons serving as managing general agents for such risk retention groups.
(b) The provisions of chapter 131, subchapter 2 of this title, pertaining to producer controlled insurers, shall apply to risk retention groups chartered in this State. (Added 1993, No. 235 (Adj. Sess.), § 9j, eff. Oct. 1, 1994; amended 2013, No. 103 (Adj. Sess.), § 4, eff. April 14, 2014.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142A - Risk Retention Group Managing General Agents, Reinsurance Intermediaries, and Producer Controlled Insurers › § 6071. Definitions

§ 6071. Definitions
As used in this chapter:
(1)(A) “Managing general agent” means any person who:
(i) manages all or part of the insurance business of a risk retention group and acts as an agent for such risk retention group, and, who, either separately or together with affiliates, underwrites gross written premium in any one-quarter or year that exceeds the greater of:
(I) 25 percent of the risk retention group’s policyholder surplus or capital; or
(II) $250,000.00; and
(ii) adjusts or pays, on behalf of the risk retention group, with settlement authority, claims in excess of $25,000.00 per occurrence or $250,000.00 in the aggregate.
(B) “Managing general agent” shall also mean a person who otherwise would be deemed as such, but for the fact that it underwrites gross written premium of less than the amounts specified above, but during the risk retention group’s preceding fiscal year underwrote in excess of 10 percent of the risk retention group’s gross written premium.
(C) Notwithstanding the provisions of subdivisions (1)(A) and (B) of this section, the following persons shall not be considered as managing general agents of a risk retention group:
(i) an officer, director, or employee of the risk retention group or of any person described in subdivisions (ii) and (iii) of this subdivision (C), provided the officer or director is not individually licensed as a managing general agent hereunder;
(ii) a person affiliated with or under common control with the risk retention group;
(iii) an association, society, or other entity, or any person under common ownership or control therewith, that has, directly or indirectly, as its owners or members, persons who are policyholders or are eligible to become policyholders of the risk retention group; and
(iv) an attorney-in-fact of a risk retention group organized as a reciprocal, or any person affiliated with or under common control with the attorney-in-fact.
(2) “Reinsurance intermediary” has the same meaning as set forth in subdivision 4815(9) of this title.
(3) “Risk retention group” means a company referred to in section 6070 of this title domiciled in this State.
(4) “Underwrite” means the authority to accept or reject risk on behalf of the risk retention group. (Added 1993, No. 235 (Adj. Sess.), § 9j, eff. Oct. 1, 1994; amended 2003, No. 55, § 10.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142A - Risk Retention Group Managing General Agents, Reinsurance Intermediaries, and Producer Controlled Insurers › § 6073. Contract required

§ 6073. Contract required
(a) No risk retention group shall enter into a managing general agent relationship unless there is in force a written contract between the parties that sets forth the respective responsibilities of each party.
(b) The contract shall contain the following minimum provisions:
(1) The method for determining compensation and other amounts payable under the contract, and the terms for payment thereof shall be fair and reasonable.
(2) The contract may be terminated by the risk retention group for cause upon written notice.
(3) The authority to underwrite or settle claims may be suspended by the risk retention group during the pendency of any dispute regarding the cause for termination.
(4) The contract shall not result in the transfer of substantial control of the risk retention group or any of the powers vested in the members or board of directors, by statute, articles of incorporation, or bylaws.
(5) Separate records of all business written under the contract shall be maintained. The risk retention group shall have access to and the right to copy all accounts and records related to its business in a form usable by the risk retention group.
(6) The required use of underwriting, rating, and claims settlement and, if applicable, reinsurance cession standards and procedures approved by the risk retention group.
(c) Within 30 days of entering into a contract with a managing general agent, the risk retention group shall provide written notification thereof to the Commissioner. Such notice of appointment shall include a statement of duties that the applicant is expected to perform on behalf of the risk retention group, the lines of insurance for which the applicant is to be authorized to act, a summary of the minimum contract provisions set forth in subsection (b) of this section and any other information reasonably requested by the Commissioner. Information contained in such notification shall be entitled to confidential treatment in accordance with section 6052 of this title. The risk retention group shall give the Commissioner notice of termination of a contract with a managing general agent within 10 days of termination. (Added 1993, No. 235 (Adj. Sess.), § 9j, eff. Oct. 1, 1994.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142A - Risk Retention Group Managing General Agents, Reinsurance Intermediaries, and Producer Controlled Insurers › § 6074. Examination authority

§ 6074. Examination authority
(a) The Commissioner may examine the books and records of a managing general agent or any affiliate thereof pertaining to or arising out of transactions with a risk retention group if the Commissioner reasonably believes that such examination is necessary.
(b) All examination reports, work 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 made under this section are confidential and are not subject to subpoena and may not be made public by the Commissioner or any other person, except as otherwise provided in this section. The Commissioner is authorized to use and make public any report, work paper, or other documents, or any other information discovered or developed during the course of any examination conducted pursuant to this section in the furtherance of any legal or regulatory action. (Added 1993, No. 235 (Adj. Sess.), § 9j, eff. Oct. 1, 1994.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 142A - Risk Retention Group Managing General Agents, Reinsurance Intermediaries, and Producer Controlled Insurers › § 6075. Hearing; penalties

§ 6075. Hearing; penalties
(a) If the Commissioner determines, after notice and hearing, that any person licensed under this chapter (i) has violated any provision of this chapter or rules adopted under this chapter, (ii) is not competent or trustworthy, or (iii) has engaged in any activity or has failed to do any act that if known at the time of licensing would have been grounds to refuse licensing, the Commissioner may impose one or more of the following penalties:
(1) order the revocation, suspension, or nonrenewal of the person’s license;
(2) order the termination, suspension, or modification of the contract between such person and the risk retention group; or
(3) impose an administrative penalty of not less than $100.00 nor more than $1,000.00 for each violation under this chapter.
(b) In imposing any such penalty, the Commissioner shall take into account the seriousness of the violation, whether or not it was willful, and the licensee’s past record of compliance with this chapter.
(c) Any hearing conducted under this chapter shall be conducted in accordance with 3 V.S.A. chapter 25. (Added 1993, No. 235 (Adj. Sess.), § 9j, eff. Oct. 1, 1994; amended 2021, No. 105 (Adj. Sess.), § 246, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 143 - Insurance Premium Finance Companies › § 7001. Definitions

§ 7001. Definitions
As used in this chapter:
(1) “Insurance premium finance company” means a person engaged in the business of entering into insurance premium finance agreements or acquiring insurance premium finance agreements from other insurance premium finance companies. For the purpose of this chapter and section 2201 of this title, insurance premium finance company includes any insurance company, insurance agent or broker, or other lender who finances insurance premiums.
(2) “Insurance premium finance agreement” means an agreement by which an insured or prospective insured promises to pay to an insurance premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent or broker in payment of premiums of an insurance contract together with interest and a service charge as authorized and limited by this chapter.
(3) “Licensee” means an insurance premium finance company holding a license issued under section 7002 of this title.
(4) “Person” means an individual, partnership, association, business corporation, nonprofit corporation, common law trust, joint stock company, or any other group of individuals however organized.
(5) “Commissioner” means the Commissioner of Financial Regulation. (Added 1983, No. 77, § 1; amended 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 180 (Adj. Sess.), § 38; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)