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2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4241. Vermont Automobile Insurance Plan

§ 4241. Vermont Automobile Insurance Plan
All insurers licensed to transact business in this State, for the issuance of automobile insurance against bodily injury, property damage, medical payments, or other loss, including what are commonly known as “liability,” “collision,” “comprehensive,” or “uninsured motorist” coverages, and every advisory or service organization operating in this State under chapter 128 of this title shall cooperate in the formation, implementation, rating, and operation of a plan for the equitable apportionment among insurers of applicants for insurance who are unable to procure that insurance through ordinary methods. (Added 1969, No. 63, § 2.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4242. General provisions of Plan

§ 4242. General provisions of Plan
The Plan shall provide:
(1) reasonable rules for the distribution of risks on an equitable basis under either a pooled or assigned plan;
(2) rates applicable to, and based upon, that class of risks as described in section 4241 of this title to which the Plan applies;
(3) limits of liability and coverages as described in section 4241 of this title that shall be not less favorable to the insured than is provided in 23 V.S.A. chapter 11, where that chapter is applicable to the insured;
(4) a method whereby applicants, insureds, and insurers are entitled to a hearing before the Commissioner of Financial Regulation, for the settlement of grievances. (Added 1969, No. 63, § 3; amended 1989, No. 225 (Adj. Sess.), § 25; 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 113 - Liability Insurance and Service Contract Companies › § 4243. Submission and approval of Plan

§ 4243. Submission and approval of Plan
(a) A plan conforming to the standards of section 4242 of this title shall be submitted to the Commissioner within 90 days of July 1, 1969. Each insurer and advisory or service organization described in section 4241 of this title shall file with the Commissioner within 90 days of July 1, 1969 a consent to operate in conformity with the Plan and an agreement to be bound by the operation of the Plan.
(b) The Plan shall be deemed approved unless disapproved by the Commissioner within 30 days of its submission. Notice of disapproval shall be given to each insurer and advisory or service organization, together with the reasons for disapproval.
(c) Changes in the Plan shall be submitted to the Commissioner at least 30 days before their effective date. Changes shall be deemed approved unless disapproved as provided in subsection (b) of this section within 30 days of their submission.
(d) After approval, the original Plan, or changes in the original Plan, may be disapproved for failure to conform to any of the standards of section 4242 of this title. If the Commissioner disapproves the Plan, the Commissioner shall give 10 days’ written notice to each insurer, and advisory or service organization affected, of a hearing at which evidence in support of the proposed change shall be submitted. If the Commissioner determines after hearing that the evidence does not justify the proposed Plan or change, the Commissioner shall order the Plan or change ineffective after a certain date, which shall be not less than 60 nor more than 120 days after the date of the order. The order shall not affect policies issued prior to the date on which the Plan or change becomes ineffective. (Added 1969, No. 63, § 4; amended 2021, No. 105 (Adj. Sess.), § 174, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4244. Commissioner to formulate Plan

§ 4244. Commissioner to formulate Plan
(a) If no Plan conforming to the standards of section 4242 of this title is submitted to the Commissioner within 90 days of July 1, 1969 or within the time provided for in any order of disapproval, the Commissioner shall prepare and promulgate a Plan conforming to the requirements of section 4242 of this title.
(b) The Plan shall be prepared and promulgated after notice to each insurer and advisory or service organization, who shall be given an opportunity to be heard. (Added 1969, No. 63, § 5.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4245. Insurers to participate in Plan

§ 4245. Insurers to participate in Plan
After approval of or preparation and promulgation of the Plan, every insurer licensed to transact business in this State shall participate in the Plan according to its provisions as described in section 4241 of this title. (1969, No. 63, § 6.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4246. Insurer or rating organization; conduct of

§ 4246. Insurer or rating organization; conduct of
If the Commissioner finds that the conduct of any insurer or advisory or service organization is not in conformity with the Plan, he or she may, after hearing, order the cessation of the conduct complained of. Further conduct in violation of the order is subject to the provisions of chapter 101, subchapter 12 of this title. (1969, No. 63, § 7; amended 1979, No. 28, § 1.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4247. Definitions

§ 4247. Definitions
As used in this subchapter:
(1) “Commissioner” means the Commissioner of Financial Regulation.
(2) “Consumer” means a natural person who buys other than for purposes of resale any tangible personal property that is distributed in commerce and that is normally used for personal, family, or household purposes, and not for commercial purposes.
(3) “Service contract holder” means a person who is the purchaser or holder of a service contract.
(4) “Manufacturer” means a person that manufactures, produces, or markets goods and sells the goods under its own name or label; or manufactures or produces goods and the goods are sold under the trade name or label of another person.
(5) “Maintenance agreement” means a contract of limited duration that provides for scheduled maintenance only.
(6) “Mechanical breakdown insurance” means any policy, contract, or agreement issued by an authorized insurer that provides for the repair, replacement, or maintenance of property or indemnification for repair, replacement, or maintenance, for the operational or structural failure of the property due to a defect in materials or workmanship or due to normal wear and tear.
(7) “Provider” means a person who issues, makes, or provides a service contract, and who is contractually obligated to provide service under a service contract and is not the manufacturer.
(8) “Service contract” means any contract or agreement to perform or indemnify for a specific duration the repair, replacement, or maintenance of property for operational or structural failure due to a defect in materials, workmanship, or normal wear and tear, with or without additional provisions for incidental payment of indemnity under limited circumstances, including towing, rental, and emergency road service.
(9) “Service contract reimbursement policy” means a policy of insurance providing full reimbursement coverage for all obligations and liabilities under the terms of a service contract issued by the provider.
(10) “Warranty” means a warranty made solely by the manufacturer, importer, or seller of property or services, without charge, that is not negotiated or separated from the sale of the product and is incidental to the sale of the product, and that guarantees indemnity for defective parts, mechanical or electrical breakdown, labor, or other remedial measures, such as repair or replacement of the property or repetition of services. (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998; amended 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4248. Registration required

§ 4248. Registration required
(a) All providers of service contracts issued, sold, or covering property located in this State shall file a registration with the Commissioner on a form prescribed by the Commissioner. Such registrations shall be renewed every three years. Providers shall submit a $600.00 fee at the time of registration and at the time of each renewal.
(b) The following are exempt from the scope of this subchapter, inclusive of this subchapter:
(1) warranties;
(2) maintenance agreements; and
(3) service contracts sold or offered for sale in commercial transactions.
(c) The types of agreements defined as service contracts in this subchapter or excluded from coverage by subsection (b) of this section are not insurance under Vermont law.
(d) A foreign or alien provider shall not transact business in this State until it has either registered with the Secretary of State to do business in Vermont or, if it is not registered to do business in Vermont, filed with the Commissioner the name and address of a person in this State upon whom service of process may be served. Failure to file such information with the Commissioner within 60 days of entering into a Vermont service contract shall constitute an appointment by such provider of the Secretary of State as its agent for service of process. (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4250. Examinations

§ 4250. Examinations
For the purpose of determining the provider’s financial stability and protecting consumer interests, the Commissioner may conduct an examination of a provider concerning service contracts sold in this State to enable the Commissioner to determine compliance or noncompliance with this subchapter. The expenses of examinations shall be paid to the State by the company or companies examined, and the Commissioner of Finance and Management shall issue warrants for the proper charges incurred in all examinations. (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998; amended 2021, No. 105 (Adj. Sess.), § 175, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4251. Consumer disclosure requirements

§ 4251. Consumer disclosure requirements
(a) Each service contract subject to this subchapter shall be written in clear, understandable language and easily read type and disclose the following:
(1) the identity of the provider and the service contract seller;
(2) the total purchase price of the contract, stated separately from the price of the goods purchased;
(3) the existence of any deductible amount;
(4) the procedures to file a claim, including the procedures for obtaining prior approval for repair work, the toll-free telephone number if prior approval is necessary for claim service and if the service contracts provide services essential to public health, safety, or welfare, the service contract provider shall either provide for 24-hour telephone assistance or state the procedure for obtaining reimbursement for emergency repairs performed outside normal business hours;
(5) the terms for transferability of the contract;
(6) the prerequisites for early cancellation;
(7) the terms, restrictions, or conditions governing termination of the service contract by the service contract holder;
(8) the obligations and duties of the service contract holder;
(9) the authorization of the original service contract holder to return the contract within 20 days of receipt of the contract if no claim has been made under the contract and obtain a refund of the full purchase price of the contract.
(b) All service contract reimbursement insurance policies insuring service contracts issued, sold, or offered for sale in this State shall conspicuously state, that upon the failure of the provider to perform under the contract, the insurer that issued the policy shall pay on behalf of the provider any sums the provider is legally obligated to pay and shall provide the service that the provider is legally obligated to perform according to the provider’s contractual obligations under the service contracts issued or sold by the provider. (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4252. Obligations of providers and insurers

§ 4252. Obligations of providers and insurers
(a) A provider is considered to be the agent of an insurer that issued a service contract reimbursement insurance policy and therefore is required to act as a fiduciary in regard to premiums, return of premiums, or other sums of money received. However, nothing in this subchapter shall be construed to make such provider subject to the insurance agent licensure requirements set forth in this title.
(b) Providers shall keep accurate accounts, books, and records concerning transactions regulated under this subchapter for at least three years after the specified period of coverage has expired. Records required by this subchapter may be maintained solely in an electronic, optical, or other storage medium, provided they are capable of being accurately reproduced upon request. These accounts, books, and records shall include:
(1) copies of each type of service contract in use;
(2) the name and address of each service contract holder to the extent that the name and address have been furnished by the service contract holder;
(3) a list of the locations where service contracts are sold; and
(4) claims files that shall contain at least the dates, amounts, and description of all receipts, claims, and expenditures related to the service contracts. (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998; amended 2021, No. 105 (Adj. Sess.), § 176, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4253. Prohibited acts

§ 4253. Prohibited acts
(a) A provider shall not use in its name, contracts or literature:
(1) the words “insurance,” “casualty,” “surety,” “mutual”; or
(2) a name deceptively similar to the name or description of any insurance or surety corporation or any other provider licensed to do business in this State.
(b) No provider or its agent shall advertise, print, display, publish, distribute, or broadcast, or cause to permit the foregoing to occur, in any manner whatsoever, any statement or representation with regard to the rates, terms, or conditions of a service contract that is false, misleading, or deceptive.
(c) No service contract sold or offered for sale to a consumer in this State shall fail to contain the authorization of the original service contract holder to return the contract within 20 days of receipt of the contract if no claim has been made under the contract and obtain a refund of the full purchase price of the contract. Each provider shall provide or mail a copy of the service contract to the customer within 14 days of the date of sale, unless the provider makes a copy of the service contract terms and conditions available to the consumer at the point of sale, in which event the provider must provide or mail the service contract to the customer within a reasonable period of time.
(d) Nothing in this subchapter shall be construed to impair or in any way affect any rule of law applicable to or governing service contracts not otherwise subject to this subchapter. (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998; amended 2021, No. 105 (Adj. Sess.), § 177, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4254. Prohibited terms

§ 4254. Prohibited terms
No service contract issued, sold, or covering property located in this State shall provide:
(1) that the consumer is not a party to the contract;
(2) that the provider has no liability to the consumer;
(3) that the consumer does not have the right to bring an action to enforce the terms of the contract or otherwise challenge the denial of a claim that the consumer believes is wrongful, subject to the provisions of any alternative dispute resolution procedure authorized by contract and by law; or
(4) that any civil action brought in connection with the service contract must be brought in the courts of a jurisdiction other than Vermont. (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4255. Penalties; enforcement

§ 4255. Penalties; enforcement
(a) The Commissioner, after proper notice and opportunity for hearing in accordance with this State’s Administrative Procedure Act, may take action to enforce the provisions of this subchapter and may:
(1) revoke or suspend the registration of the service contract provider;
(2) order the provider to cease and desist from further service contract operations;
(3) impose a penalty of not more than $1,000.00 for each violation or $10,000.00 for each violation the Commissioner finds to be willful; and
(4) order the provider to make restitution to contract holders.
(b) Failure to comply with section 4251 or 4253 of this title shall constitute an unfair or deceptive act in commerce enforceable under 9 V.S.A. § 2461(b). (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 113 - Liability Insurance and Service Contract Companies › § 4256. Exemption for certain delivery service maintenance and repair contracts

§ 4256. Exemption for certain delivery service maintenance and repair contracts
The provisions of this subchapter shall not apply to service contracts with a duration of one year or less where the provider also has an existing agreement to supply liquid fuel used in the course of normal operation of the property subject to the service contract. (Added 1997, No. 109 (Adj. Sess.), § 2, eff. Sept. 1, 1998.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 114 - Portable Electronics Insurance › § 4257. Definitions

§ 4257. Definitions
As used in this chapter:
(1) “Portable electronics” means electronic devices that are portable in nature, their accessories, and services related to the use of such devices.
(2) “Portable electronics insurance” means insurance that may be offered on a month-to-month or other periodic basis as a group or master commercial inland marine policy that provides coverage for the repair or replacement of portable electronics against any one or more of the following causes of loss: loss, theft, inoperability due to mechanical failure, malfunction, damage, or other similar causes of loss. The term does not include a service contract governed by chapter 113, subchapter 4 of this title, a policy of insurance covering a seller’s or a manufacturer’s obligations under a warranty, or a homeowner’s, renter’s, private passenger automobile, commercial multi-peril, or similar policy.
(3) “Portable electronics vendor” means a person in the business of selling or leasing portable electronics directly or indirectly. (Added 2011, No. 136 (Adj. Sess.), § 9, eff. May 18, 2012.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 114 - Portable Electronics Insurance › § 4258. Premium billings

§ 4258. Premium billings
The charges for portable electronics insurance coverage may be billed and collected by a portable electronics vendor. Any charge to a customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics shall be separately itemized on the customer’s bill. If the portable electronics insurance coverage is included with the purchase or lease of portable electronics, a portable electronics vendor shall clearly and conspicuously disclose to the customer that the portable electronics insurance coverage is included with the portable electronics. A portable electronics vendor billing and collecting such charges shall not be required to maintain such funds in a segregated account, provided that the vendor is authorized by the insurer to hold such funds in an alternative manner and remits such amounts to the insurer or the producer appointed by the insurer to supervise the administration of a portable electronics insurance program within 60 days of receipt. All funds received by a portable electronics vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. Portable electronics vendors may receive compensation for billing and collection services. (Added 2011, No. 136 (Adj. Sess.), § 9, eff. May 18, 2012.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 114 - Portable Electronics Insurance › § 4259. Termination and modification requirements

§ 4259. Termination and modification requirements
Notwithstanding any other provision of law, the terms for the termination or modification of a policy of portable electronics insurance shall be as set forth in the policy. (Added 2011, No. 136 (Adj. Sess.), § 9, eff. May 18, 2012.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 114 - Portable Electronics Insurance › § 4260. Notice requirements

§ 4260. Notice requirements
(a) Whenever notice or correspondence with respect to a policy of portable electronics insurance is required pursuant to the policy or is otherwise required by law, it shall be in writing. Notwithstanding any other provision of law, notices and correspondence may be sent either by mail or by electronic means as set forth in this section. If the notice or correspondence is mailed, it shall be sent to the portable electronics vendor at the vendor’s mailing address specified for such purpose and to its affected customers’ last known mailing address on file with the insurer. The insurer or vendor of portable electronics shall maintain proof of mailing in a form authorized or accepted by the U.S. Postal Service or other commercial mail delivery service. If the notice or correspondence is sent by electronic means, it shall be sent to the portable electronics vendor at the vendor’s electronic mail address specified for such purpose and to its affected customers’ last known electronic mail address as provided by each customer to the insurer or vendor of portable electronics. A customer’s provision of an electronic mail address to the insurer or vendor of portable electronics is deemed consent to receive notices and correspondence by electronic means at such address if notice of that consent is provided to the customer within 30 calendar days. The insurer or vendor of portable electronics shall maintain proof that the notice or correspondence was sent.
(b) Notice or correspondence required pursuant to a policy of portable electronics insurance or otherwise required by law may be sent on behalf of the insurer or vendor by an insurance producer appointed by the insurer to supervise the administration of a portable electronics insurance program. (Added 2011, No. 136 (Adj. Sess.), § 9, eff. May 18, 2012; amended 2017, No. 80, § 17.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 114 - Portable Electronics Insurance › § 4261. Rulemaking; licensing; claims; sales

§ 4261. Rulemaking; licensing; claims; sales
The Commissioner shall adopt rules establishing a business entity limited lines producer license for the sale of portable electronics insurance as well as requirements for the sale of portable electronics insurance by a vendor and its employees and authorized representatives and standards for the adjusting of claims under a policy of portable electronics insurance by a supervising entity. (Added 2011, No. 136 (Adj. Sess.), § 9, eff. May 18, 2012.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4361. Mutual associations authorized

§ 4361. Mutual associations authorized
Employers who are subject to the requirements of 21 V.S.A. chapter 9 may, with the approval of the Commissioner, associate themselves in accordance with the law for the formation of corporations without capital stock for the purpose of establishing and maintaining mutual associations to insure their liabilities under 21 V.S.A. chapter 9. (Amended 1981, No. 165 (Adj. Sess.), § 1; 2021, No. 105 (Adj. Sess.), § 178, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4362. Commissioner’s approval required

§ 4362. Commissioner’s approval required
The Commissioner may require the incorporators of an association formed pursuant to section 4361 of this subchapter to include in its proposed certificate of incorporation any lawful provisions for the regulation of the affairs of the association and the definition of its powers and the powers of its officers, directors, and incorporators as the Commissioner may deem necessary to ensure that it is well designed and wisely adapted to its proposed purposes. When the Commissioner has approved the certificate and it has been filed with the Secretary of State, the incorporators shall promptly submit copies of it to the Office of the Commissioner and of the Commissioner of Labor. (Amended 2005, No. 103 (Adj. Sess.), § 3, eff. April 5, 2006; 2021, No. 105 (Adj. Sess.), § 179, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4363. Membership

§ 4363. Membership
Membership in such association shall be limited to such employers as are liable for compensation to their employees under the workers’ compensation law, and such association shall have power by appropriate bylaws to provide for the admission, suspension, withdrawal, or expulsion of members. (Amended 1981, No. 165 (Adj. Sess.), § 1.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4364. Control of association

§ 4364. Control of association
Except as otherwise provided pursuant to this subchapter, an association shall be subject to the same rules and control as other corporations or associations taking similar risks in this State, and the Commissioner shall have jurisdiction and power over the association as provided by the insurance laws of this State. (Amended 2021, No. 105 (Adj. Sess.), § 180, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4365. Policies

§ 4365. Policies
A policy shall not be issued by such association until membership in such number and with such numbers of employees as the Commissioner may decide will give a fair diffusion of risks shall have obligated themselves to take policies immediately upon their authorization, nor shall a policy be issued except such as the Commissioner shall have approved as conforming in all respects to the requirements of the law relating to such associations. If, at any time by the retirement of members, reduction of numbers of employees, or other cause the membership of any association shall appear to the Commissioner no longer to afford a fair diffusion of risks, he or she may suspend or forbid the further issue of policies until the former conditions of the association have been restored.
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4366. Officers and voting rights

§ 4366. Officers and voting rights
The affairs of such an association shall be managed by such officers and directors as may be chosen in a manner prescribed by the bylaws of the association, provided each member shall be entitled to cast at least one ballot in all elections and votes and that a member who has had for six months an average of more than 100 and not more than 250 employees to whom he or she is bound to pay compensation under the workers’ compensation law shall be entitled to two ballots, and that each additional 150 employees shall entitle such member to an additional ballot, but no member shall be entitled to cast more than 10 ballots. (Amended 1981, No. 165 (Adj. Sess.), § 1.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4367. Power to prescribe and enforce safety rules

§ 4367. Power to prescribe and enforce safety rules
An association formed pursuant to the provisions of this subchapter shall have power to prescribe and enforce reasonable rules for safety on the premises of its members, subject, however, to the approval of the Commissioner of Labor. The association’s inspectors shall have free access to all members’ premises during regular working hours to ensure the safety of those premises. (Amended 2021, No. 105 (Adj. Sess.), § 181, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4368. Premium rates

§ 4368. Premium rates
An association formed pursuant to this subchapter shall have power to determine the premium rates for each occupation or risk insured by it and to prescribe rates of cash premiums sufficient to cover losses incurred and current cost. The premium rate on each policy shall prevail for a full year but annually may be changed by the directors. As used in this section, “current cost” means an amount sufficient to cover the losses and expenses incurred and a premium reserve equal to 50 percent of all premiums and assessments levied or paid. (Amended 2021, No. 105 (Adj. Sess.), § 182, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4369. Reserve requirements

§ 4369. Reserve requirements
Members of an association formed pursuant to the provisions of this subchapter shall be required to pay yearly in advance cash premiums and in addition thereto an amount in negotiable notes or cash sufficient to maintain a reserve equal to that required of other companies doing the same class of business. Notes shall be payable in whole or in part on the vote of the directors of the association as such payments may be required to meet estimated losses or expenses in excess of the current cost and to meet claims covering losses not payable within the same fiscal year within which the claim originated. The directors may fix rates of interest on either notes or balances. (Amended 2021, No. 105 (Adj. Sess.), § 183, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4372. Approval of premiums, liabilities, assessments, and dividends

§ 4372. Approval of premiums, liabilities, assessments, and dividends
Such association, subject to the approval of the Commissioner, may determine the premiums, contingent liabilities, assessments, penalties, and dividends of its members and enforce or administer the same.
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 117 - Workers' Compensation Insurance › § 4373. Bylaws and regulations

§ 4373. Bylaws and regulations
The association may also make and amend bylaws or regulations consistent with its certificate of incorporation, for the prompt, economical, and safe conduct of its affairs. All bylaws and regulations of an association, except safety rules made under the provisions of section 4367 of this subchapter, shall be filed with the Commissioner and shall be subject to the Commissioner’s approval. (Amended 2021, No. 105 (Adj. Sess.), § 184, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4460. Statutory purposes

§ 4460. Statutory purposes
The statutory purpose of the exemption for fraternal societies in section 4500 of this title is to support benevolent societies that provide benefits to members and to the community. (Added 2013, No. 200 (Adj. Sess.), § 18.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4461. Fraternal benefit societies defined

§ 4461. Fraternal benefit societies defined
(a) Any incorporated society, order, or supreme lodge, without capital stock, including one exempted under the provisions of subdivision 4502(a)(2) of this title, whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and that makes provision for the payment of benefits in accordance with this chapter, is hereby declared to be a fraternal benefit society.
(b) As used in this chapter:
(1) “Society” means a fraternal benefit society.
(2) “Commissioner” means the Commissioner of Financial Regulation. (Added 1959, No. 197, § 1, eff. Nov. 22, 1959; amended 2021, No. 105 (Adj. Sess.), § 185, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4462. Lodge system defined

§ 4462. Lodge system defined
A society having a supreme legislative or governing body and subordinate lodges or branches by whatever name known, into which members are elected, initiated, or admitted in accordance with its constitutions, laws, ritual, and rules, which subordinate lodges or branches shall be required by the laws of the society to hold regular meetings, shall be deemed to be operating on the lodge system. (Added 1959, No. 197, § 2, eff. Nov. 22, 1959.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4463. Representative form of government defined

§ 4463. Representative form of government defined
A society shall be deemed to have a representative form of government when:
(1) it provides in its constitution or laws for a supreme legislative or governing body, composed of representatives elected either by the members or by delegates elected directly or indirectly by the members, together with such other members of the body as may be prescribed by the society’s constitution and laws;
(2) the representatives elected constitute a majority in number and have not less than two-thirds of the votes nor less than the votes required to amend its constitution and laws;
(3) the meetings of the supreme legislative or governing body and the election of officers, representatives, or delegates are held as often as once in four calendar years;
(4) each insured member is eligible for election to act or serve as a delegate to the meeting;
(5) the society has a board of directors charged with the responsibility for managing its affairs in the interim between meetings of its supreme legislative or governing body, subject to control by the body and having powers and duties delegated to it in the constitution or laws of the society;
(6) the board of directors is elected by the supreme legislative or governing body, except in case of filling a vacancy in the interim between meetings of the body;
(7) the officers are elected either by the supreme legislative or governing body or by the board of directors; and
(8) the members, officers, representatives, or delegates may not vote by proxy. (Added 1959, No. 197, § 3, eff. Nov. 22, 1959.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4465. Corporate powers retained

§ 4465. Corporate powers retained
Any incorporated society authorized to transact business in this State on November 22, 1959 may thereafter exercise all the rights, powers, and privileges prescribed in this chapter and in its charter or articles of incorporation as far as consistent with this chapter. A domestic society shall not be required to reincorporate. (Added 1959, No. 197, § 5, eff. Nov. 22, 1959.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4466. Existing voluntary associations; may incorporate

§ 4466. Existing voluntary associations; may incorporate
(a) After one year from November 22, 1959, no unincorporated or voluntary association shall be permitted to transact business in this State as a fraternal benefit society.
(b) Any domestic voluntary association now authorized to transact business in this State may incorporate and shall receive from the Commissioner of Financial Regulation a permanent certificate of incorporation as a fraternal benefit society when:
(1) it has completed its conversion to an incorporated society not later than one year from November 22, 1959;
(2) it has filed its articles of incorporation and has satisfied the other requirements described in section 4464 of this title; and
(3) the Commissioner of Financial Regulation has made such examination and procured whatever additional information he or she believes advisable.
(c) Every voluntary association so incorporated shall incur the obligations and enjoy the benefits thereof the same as though originally incorporated, and the corporation shall be deemed a continuation of the original voluntary association. The officers thereof shall serve through their respective terms as provided in its original articles of association, but their successors shall be elected and serve as provided in its articles of incorporation. Incorporation of a voluntary association shall not affect existing suits, claims, or contracts. (Added 1959, No. 197, § 6, eff. Nov. 22, 1959; amended 1989, No. 225 (Adj. Sess.), § 25; 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 121 - Fraternal Benefit Societies › § 4467. Location of office; place of meeting

§ 4467. Location of office; place of meeting
The principal office of any domestic society shall be located in this State. The meetings of its supreme legislative or governing body may be held in any state, district, province, or territory wherein the society has at least five subordinate branches and all business transacted at the meetings shall be as valid in all respects as if the meetings were held in this State. (Added 1959, No. 197, § 7, eff. Nov. 22, 1959.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4469. Conversion of fraternal benefit society into mutual life insurance company

§ 4469. Conversion of fraternal benefit society into mutual life insurance company
Any domestic fraternal benefit society may be converted and licensed as a mutual life insurance company by compliance with all the requirements of sections 3366, 3423-3425, 3701-3711 of this title if such plan of conversion is approved by the Commissioner of Financial Regulation. The plan shall be prepared in writing setting forth in full the terms and conditions thereof. The board of directors shall submit the plan to the supreme legislative or governing body of the society at any regular or special meeting thereof, by giving a full, true, and complete copy of the plan with the notice of the meeting. The notice shall be given as provided in the laws of the society for the convocation of a regular or special meeting of the body, as the case may be. The affirmative vote of two-thirds of all members of the body shall be necessary for the approval of the agreement. No conversion may take effect until approved by the Commissioner of Financial Regulation who may give the approval if he or she finds that the proposed change is in conformity with law and not prejudicial to the certificate holders of the society. (Added 1959, No. 197, § 9, eff. Nov. 22, 1959; 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 121 - Fraternal Benefit Societies › § 4470. Qualifications for membership

§ 4470. Qualifications for membership
(a) A society may admit to benefit membership any person not less than 15 years of age, at his or her nearest birthday, who has furnished evidence of insurability acceptable to the society. A member who applies for additional benefits more than six months after becoming a benefit member shall furnish additional evidence of insurability acceptable to the society.
(b) A person admitted before becoming 18 years of age is bound by the terms of the application and certificate and by all the laws and rules of the society and is entitled to all the rights and privileges of membership to the same extent as though the age of majority had been reached at the time of application. A society may also admit general or social members who shall have no voice or vote in the management of its insurance affairs. (Added 1959, No. 197, § 10, eff. Nov. 22, 1959; amended 2021, No. 105 (Adj. Sess.), § 188, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4471. Articles of incorporation, constitution, and laws; amendments

§ 4471. Articles of incorporation, constitution, and laws; amendments
(a) A domestic society may amend its articles of incorporation, constitution, or laws in accordance with the provisions thereof by action of its supreme legislative or governing body at any regular or special meeting of the society or, if its articles of incorporation, constitution, or laws so provide, by referendum. The referendum may be held in accordance with the provisions of its articles of incorporation, constitution, or laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members, or by the vote of local lodges or branches. No amendment submitted for adoption by referendum may be adopted unless, within six months from the date of its submission, a majority of all of the voting members of the society have signified their consent to the amendment by one of the methods specified in this section.
(b) No amendment to the articles of incorporation, constitution, or laws of any domestic society may take effect unless approved by the Commissioner, who shall approve the amendment if the Commissioner finds that it has been duly adopted and is not inconsistent with any requirement of the laws of this State or with the character, objects, and purposes of the society. Unless the Commissioner disapproves an amendment within 60 days after its filing, the amendment shall be considered approved. The approval or disapproval of the Commissioner shall be in writing and mailed to the secretary or corresponding officer of the society at its principal office. If the Commissioner disapproves the amendment, the Commissioner shall state the reasons for the disapproval in the written notice.
(c) Within 90 days from the approval thereof by the Commissioner of Financial Regulation, all amendments, or a synopsis thereof, shall be furnished to all members of the society either by mail or by publication in full in the official organ of the society. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or synopsis thereof, stating facts that show that they have been duly addressed and mailed, shall be prima facie evidence that the amendments or synopsis thereof have been furnished the addressee.
(d) Every foreign or alien society authorized to do business in this State shall file with the Commissioner of Financial Regulation a duly certified copy of all amendments of, or additions to, its articles of incorporation, constitution, or laws within 90 days after the enactment of same.
(e) Printed copies of the constitution or laws as amended, certified by the secretary or corresponding officer of the society, shall be prima facie evidence of the legal adoption thereof. (Added 1959, No. 197, § 11, eff. Nov. 22, 1959; amended 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 180 (Adj. Sess.), § 38; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2021, No. 105 (Adj. Sess.), § 189, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4472. Institutions

§ 4472. Institutions
(a) It shall be lawful for a society to create, maintain, and operate charitable, benevolent, or educational institutions for the benefit of its members and their families and dependents and for the benefit of children insured by the society. For that purpose, it may own, hold, or lease personal property or real property located within or outside this State, with necessary buildings thereon. The property shall be reported in every annual statement but shall not be allowed as an admitted asset of the society.
(b) Maintenance, treatment, and proper attendance in any such institution may be furnished free or a reasonable charge may be made therefor, but no such institution shall be operated for profit. The society shall maintain a separate accounting of any income and disbursements under this section and report them in its annual statement. No society shall own or operate funeral homes or undertaking establishments. (Added 1959, No. 197, § 12, eff. Nov. 22, 1959.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4473. No personal liability

§ 4473. No personal liability
The officers and members of the supreme, grand, or any subordinate body of a society shall not be personally liable for payment of any benefits provided by a society. (Added 1959, No. 197, § 13, eff. Nov. 22, 1959.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4474. Benefits

§ 4474. Benefits
(a) A society authorized to do business in this State may provide for the payment of:
(1) death benefits in any form;
(2) endowment benefits;
(3) annuity benefits;
(4) temporary or permanent disability benefits as a result of disease or accident;
(5) hospital, medical, or nursing benefits due to sickness or bodily infirmity or accident;
(6) monument or tombstone benefits to the memory of deceased members not exceeding in any case the sum of $300.00; and
(b) Such benefits may be provided on the lives of members or upon application of a member, on the lives of the member’s family, including the member, the member’s spouse and minor children, in the same or separate certificates. (Added 1959, No. 197, § 14, eff. Nov. 22, 1959.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 121 - Fraternal Benefit Societies › § 4475. Benefits on lives of children

§ 4475. Benefits on lives of children
(a) A society may provide for benefits on the lives of children under the minimum age for adult membership but not greater than 18 years of age at the time of application for such benefits, upon the application of an adult person who has an insurable interest, as its laws or rules may provide, which benefits shall be in accordance with the provisions of subsection 4474(a) of this title. A society may, at its option, organize and operate branches for such children. Membership and initiation in local lodges shall not be required of such children, nor shall they have a voice in the management of the society.
(b) A society shall have power to provide for the designation and changing of designation of beneficiaries in the certificates providing for the benefits and to provide in all other respects for the regulation, government, and control of the certificates and all rights, obligations, and liabilities of and connected with the certificates. (Added 1959, No. 197, § 15, eff. Nov. 22, 1959; amended 2021, No. 105 (Adj. Sess.), § 190, eff. July 1, 2022.)