2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 141 - Captive Insurance Companies › § 6038. Delinquency of sponsored captive insurance companies

§ 6038. Delinquency of sponsored captive insurance companies
(a) Except as otherwise provided in this section, the provisions of chapter 145 of this title shall apply in full to a sponsored captive insurance company and to each of its protected cells.
(b) Upon any order of supervision, rehabilitation, or liquidation of a sponsored captive insurance company or any of its protected cells, the receiver shall manage the assets and liabilities of the sponsored captive insurance company or any of its protected cells pursuant to the provisions of this subchapter.
(c) Notwithstanding the provisions of chapter 145 of this title to the contrary:
(1) In connection with the conservation, rehabilitation, or liquidation of a sponsored captive insurance company or any of its protected cells, the assets and liabilities of a protected cell shall at all times be kept separate from, and shall not be commingled with, those of other protected cells and the sponsored captive insurance company.
(2) The assets of a protected cell may not be used to pay any expenses or claims other than those attributable to such protected cell.
(3) Unless the sponsor consents and the Commissioner has granted prior written approval, the assets of the sponsored captive insurance company’s general account shall not be used to pay any expenses or claims attributable solely to a protected cell or protected cells of the sponsored captive insurance company. In the event that the assets of the sponsored captive insurance company’s general account are used to pay expenses or claims attributable solely to a protected cell or protected cells of the sponsored captive insurance company, the sponsor is not required to contribute additional capital and surplus to the sponsored captive insurance company’s general account, notwithstanding the provisions of section 6004 of this title.
(4) A sponsored captive insurance company’s capital and surplus shall at all times be available to pay any expenses of or claims against the sponsored captive insurance company.
(d) Notwithstanding the provisions of chapter 145 of this title or any other provision of law to the contrary, and, in addition to the provisions of this section, in the event of an insolvency of a sponsored captive insurance company or any of its protected cells where the Commissioner determines that one or more protected cells remain solvent, the Commissioner may separate such cells from the sponsored captive insurance company and, on application of the sponsor, may allow for the conversion of such protected cells into one or more new or existing sponsored captive insurance companies, or one or more other captive insurance companies, pursuant to a plan or plans of operation approved by the Commissioner.
(e) Notwithstanding the provisions of chapter 145 of this title or any other provision of law to the contrary, and in addition to the provisions of this section, in the event of an insolvency of one or more protected cells of a sponsored captive insurance company, the Commissioner may separate such cell or cells from the sponsored captive insurance company and may allow for the conversion of such protected cell or cells into one or more new or existing sponsored captive insurance companies, or one or more other captive insurance companies, pursuant to a plan or plans of operation approved by the Commissioner. (Added 2003, No. 55, § 9; amended 2009, No. 42, § 24, eff. May 27, 2009; 2015, No. 20, § 7, eff. May 7, 2015; 2021, No. 139 (Adj. Sess.), § 14, eff. May 27, 2022.)