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2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3617. Powers and duties of Commissioner

§ 3617. Powers and duties of Commissioner
(a) The Commissioner shall:
(1) notify the Association of the existence of an insolvent insurer not later than three days after he or she receives notice of the determination of the insolvency and furnish to the Association a copy of any complaint or order which was served on his or her office;
(2) upon request of the Board of Directors, provide the Association with a statement of the net written premiums of each member insurer.
(b) The Commissioner may:
(1) Require that the Association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this subchapter. Such notification shall be by mail at their last known address, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation shall be sufficient.
(2) Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this State of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the Commissioner may levy a fine on any member insurer which fails to pay an assessment when due. The fine shall not exceed five percent of the unpaid assessment per month, except that no fine shall be less than $500.00 per month.
(3) Revoke the designation of any servicing facility if he or she finds claims are being handled unsatisfactorily.
(c) Any final action or order of the Commissioner under this subchapter shall be subject to judicial review by the Superior Court for the county in which the aggrieved party resides, or if a corporation, in which the principal office of the corporation is located, or if a nonresident, by the Superior Court for the County of Washington. (Added 1969, No. 279 (Adj. Sess.), § 9; amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 1979, No. 18, §§ 13, 14; 1995, No. 167 (Adj. Sess.), § 3.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3618. Effect of paid claims

§ 3618. Effect of paid claims
(a) Any person recovering under this subchapter shall be deemed to have assigned his or her rights under the policy to the Association to the extent of his or her recovery from the Association. Every insured or claimant seeking the protection of this subchapter shall cooperate with the Association to the same extent as such person would have been required to cooperate with the insolvent insurer. The Association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except such causes of action as the insolvent insurer would have had if such sums had been paid by the insolvent insurer. In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the Association shall not operate to reduce the liability of insured’s to the receiver, liquidator, or statutory successor for unpaid assessments.
(b) The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the Association or a similar organization in another state. The court having jurisdiction shall grant such claims priority equal to that which the claimant would have been entitled in the absence of this subchapter against the assets of the insolvent insurer. The expenses of the Association or similar organization in handling claims shall be accorded the same priority as the liquidator’s expenses.
(c) The Association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the Association, the expenses paid in the handling of paid or contested covered claims, estimates of anticipated claims on the Association, and estimates of the expenses of handling those anticipated claims, which shall preserve the rights of the Association against the assets of the insolvent insurer. (Added 1969, No. 279 (Adj. Sess.), § 10; amended 1979, No. 18, § 15.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3619. Nonduplication of recovery

§ 3619. Nonduplication of recovery
(a) Any person having a claim against an insurer under any provision in an insurance policy other than policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his or her right under such policy. Any amount payable on a covered claim under this subchapter shall be reduced by the amount of any recovery under such insurance policy.
(b) Any person having a claim which may be recovered from more than one insurance guaranty association or its equivalent shall seek recovery first from the Association of the place of residence of the insured except that if it is a first party claim for damage to property with a permanent location, he or she shall seek recovery first from the association of the location of the property, and if it is a workers’ compensation claim, he or she shall seek recovery first from the association of the residence of the claimant. Any recovery under this subchapter shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent. (Added 1969, No. 279 (Adj. Sess.), § 11; amended 1979, No. 18, § 16; 1981, No. 165 (Adj. Sess.), § 1.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3620. Prevention of insolvencies

§ 3620. Prevention of insolvencies
To aid in the detection and prevention of insurer insolvencies:
(1) It shall be the duty of the Board of Directors, upon majority vote, to notify the Commissioner of any information indicating any member insurer may be insolvent or in a financial condition hazardous to the policyholders or the public.
(2) The Board of Directors may, upon majority vote, request that the Commissioner order an examination of any member insurer which the Board in good faith believes may be in a financial condition hazardous to the policyholders or the public. Within 30 days of the receipt of such request, the Commissioner shall begin such examination. The examination may be conducted as a National Association of Insurance Commissioners examination or may be conducted by such persons as the Commissioner designates. The cost of such examination shall be paid by the Association and the examination report shall be treated as are other examination reports. In no event shall such examination report be released to the Board of Directors prior to its release to the public, but this shall not preclude the Commissioner from complying with subdivision (3) of this section. The Commissioner shall notify the Board of Directors when the examination is completed. The request for an examination shall be kept on file by the Commissioner but it shall not be open to public inspection prior to the release of the examination report to the public.
(3) It shall be the duty of the Commissioner to report to the Board of Directors when he or she has reasonable cause to believe that any member insurer examined or being examined at the request of the Board of Directors may be insolvent or in a financial condition hazardous to the policyholders or the public.
(4) The Board of Directors may, upon majority vote, make reports and recommendations to the Commissioner upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any member insurer. Such reports and recommendations shall not be considered public documents.
(5) The Board of Directors may, upon majority vote, make recommendations to the Commissioner for the detection and prevention of insurer insolvencies.
(6) The Board of Directors shall, at the conclusion of any insurer insolvency in which the Association was obligated to pay covered claims, prepare a report on the history and causes of such insolvency, based on the information available to the Association, and submit such report to the Commissioner. (Added 1969, No. 279 (Adj. Sess.), § 12.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3621. Examination of Association

§ 3621. Examination of Association
The Association shall be subject to examination and regulation by the Commissioner. The Board of Directors shall submit, not later than March 30 of each year, a financial report for the preceding calendar year in a form approved by the Commissioner. (Added 1969, No. 279 (Adj. Sess.), § 13.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3622. Tax exemption

§ 3622. Tax exemption
The Association shall be exempt from payment of all fees and all taxes levied by this State or any of its subdivisions except taxes levied on real or personal property. (Added 1969, No. 279 (Adj. Sess.), § 14.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3623. Recognition of assessments in rates

§ 3623. Recognition of assessments in rates
The rates and premiums charged for insurance policies to which this subchapter applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the Association by the member insurer less any amounts returned to the member insurer by the Association and such rates shall not be deemed excessive because they contain an amount reasonably calculated to recoup assessments paid by the member insurer. (Added 1969, No. 279 (Adj. Sess.), § 15.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3624. Immunity

§ 3624. Immunity
There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the Association or its agents or employees, the Board of Directors, or the Commissioner or his or her representatives for any action taken by them in the performance of their powers and duties under this subchapter. (Added 1969, No. 279 (Adj. Sess.), § 16.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3625. Stay of proceedings; reopening of default judgment

§ 3625. Stay of proceedings; reopening of default judgment
All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this State shall be stayed for up to six months and such additional time thereafter as may be determined by the court from the date on which the insolvency is declared or an ancillary proceeding is instituted in the State, whichever is later, to permit proper defense by the Association of all pending causes of action. As to any covered claims arising from a judgment under any decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend an insured, the Association either on its own behalf or on behalf of such insured may apply to have such judgment, order, decision, verdict, or finding set aside by the same court or administrator that made such judgment, order, decision, verdict, or finding and shall be permitted to defend against such claim on the merits. (Added 1969, No. 279 (Adj. Sess.), § 17; amended 1979, No. 18, § 17.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3626. Prohibition against advertising of membership in Association

§ 3626. Prohibition against advertising of membership in Association
A person who makes, publishes, or circulates, or causes to be made, published or circulated, any statement which uses the existence of the Association for the purpose of sales, solicitation or inducement to purchase any form of insurance within the scope of this subchapter shall be subject to an administrative penalty of not more than $500.00 for each violation. (Added 1979, No. 18, § 18; amended 1995, No. 167 (Adj. Sess.), § 4.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3635. Insolvency of ceding company

§ 3635. Insolvency of ceding company
(a) No credit shall be allowed, as an admitted asset or deduction from liability, to any ceding insurer for reinsurance, unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable under contract or contracts reinsured by the assuming insurer on the basis of the claims allowed against the ceding insurer in the insolvency proceedings, without diminution because of the insolvency of the ceding insurer, directly to the ceding insurer or to its domiciliary liquidator or receiver except: (1) where the contract specifically provides for payment to the insured or his or her assignee or other persons or entity named in the insured’s policy as a payee of such reinsurance in the event of the insolvency of the ceding insurer or (2) where the assuming insurer with the consent of the direct insured or insureds has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.
(b) The domiciliary liquidator or receiver of an insolvent ceding insurer shall give written notice of the pendency of a claim against such ceding insurer on the contract reinsured within a reasonable time after such claim is filed in the insolvency proceeding. During the pendency of such claim any assuming insurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defenses which it deems available to the ceding insurer, its liquidator or receiver. Such expense shall be chargeable, subject to court approval, against the insolvent ceding insurer as part of the expense of liquidation to the extent of a proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer. Where two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though such expense had been incurred by the ceding company. (Added 1985, No. 145 (Adj. Sess.), § 5.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3636. Reinsurance contract

§ 3636. Reinsurance contract
In the event of the rehabilitation, receivership, or liquidation of a ceding insurer, no person shall have any rights against the reinsurer of such ceding insurer which are not specifically set forth in the contract of reinsurance or in a specific agreement between the reinsurer and the person. (Added 1985, No. 145 (Adj. Sess.), § 5.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3641. Claims, rights, title, and interests of nonresidents

§ 3641. Claims, rights, title, and interests of nonresidents
When by the terms of any policy of insurance, annuity contract, or contract supplemental to any policy of insurance or annuity contract, issued by an insurance company organized under the laws of this State, any claim, right, title, or interest therein is vested in a person residing in another state or country, or in the estate of such nonresident person, such claim may be paid to, and such right, title, or interest may be transferred or released by, the administrator, executor, or guardian of such nonresident person or estate appointed in the State or country where the person resides or resided at the time of death, provided no administrator, executor, or guardian of such nonresident person or estate has been appointed in this State at the time of such payment, transfer, or claim. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 12, § 1).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3642. Liability for payments to nonresidents

§ 3642. Liability for payments to nonresidents
An action shall not be maintained against any such insurance company upon any right of action arising out of an insurance policy, annuity contract, or contract supplemental to any insurance policy or annuity contract, issued by such company, vested in a person residing in another state or country, or in the estate of such nonresident person, if prior to actual notice of the appointment in this State of an administrator, executor, or guardian of the estate or person of such nonresident, such right of action has been discharged or released by the executor, administrator, or guardian of such nonresident person or estate appointed in the state of his or her residence, or by a transferee of such policy, annuity contract, contract supplemental to any policy of insurance, or annuity contract or right of action thereon. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 12, § 2).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3662. Nonpayment of judgment; penalty

§ 3662. Nonpayment of judgment; penalty
In addition to accrual of interest and costs under section 3665 of this title, if a judgment against an insurance company is not paid within 30 days after demand made upon an agent of such company, and notice thereof given to the Commissioner by the officer holding the execution, the Commissioner may suspend the right of the company to do business in this State until it is paid. If such company, or an agent thereof, after notice of such suspension, shall issue a policy in this State, such company and agent shall each be subject to an administrative penalty of not more than $10,000.00 for each policy. A policy so granted shall be valid against the company. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 13, § 2); amended 1987, No. 106, § 1; 1995, No. 167 (Adj. Sess.), § 6.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3663. Minimum limitation on actions; void policy provisions

§ 3663. Minimum limitation on actions; void policy provisions
A policy of fire, life, accident, liability, or burglary insurance, or an indemnity, surety, or fidelity contract or bond issued or delivered in this State by an insurance company doing business herein shall not contain a condition or clause limiting the time of commencement of an action on such policy or contract to a period less than 12 months from the occurrence of the loss, death, accident, or default, nor a condition or clause making an award by appraisers, fixing the amount of loss by the insured or beneficiary in such policy or contract, a condition precedent to bringing or maintaining an action on such policy or contract. Any such conditions or clauses shall be null and void. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 13, § 3).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3664. Forms; filing proof of loss and other documents; waiver of filing

§ 3664. Forms; filing proof of loss and other documents; waiver of filing
Insurance companies, societies, or associations, or insurance adjusters appointed by said companies, societies, or associations shall furnish in form for completion by the claimant, as defined in section 3665a of this title, or beneficiary, as defined in section 3665b of this title, all documents as to proof of loss or other matter required by contract to be submitted to the companies. Failure to furnish said forms within a reasonable time after notice of loss or damage is received by said companies, societies, or associations shall be deemed a waiver of any requirement that proof of loss shall be filed with the insurer on said forms as a condition precedent to the recovery of losses or claims. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 13, § 4); amended 2019, No. 103 (Adj. Sess.), § 13.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3665a. Timely payment of property and casualty insurance claims; interest

§ 3665a. Timely payment of property and casualty insurance claims; interest
(a) This section applies to policies of property, casualty, surety, and title insurance, as defined in section 3301 of this title. It does not apply to workers’ compensation insurance. As used in this section, “claimant” means any person asserting a right to payment under an insurance policy or contract arising out of the occurrence of the contingency or loss covered by such policy or contract or any person asserting a claim against any other person or the interests insured under an insurance policy or contract, and includes a claimant’s designated legal representative and any member of the claimant’s immediate family designated in writing by the claimant.
(b) Unless a different time period is specified in another section of this title, all payments of claims under policies of insurance shall be made within time periods provided by this section:
(1) For claims under policies of insurance other than surety insurance and title insurance, within 10 business days after the date that settlement of the claim is agreed upon between the insurer, the claimant, and the loss payee, as applicable, and in accordance with rules adopted by the Commissioner.
(2) For claims under policies of surety and title insurance, within 30 days after the date that settlement of the claim is agreed upon between the insurer, the claimant, and the loss payee, as applicable, and in accordance with rules adopted by the Commissioner.
(3) If a claim is contested, within 30 days after the entry of a final nonappealable judgment against the insurer; the entry of a binding arbitration decision between the insurer, the claimant, the loss payee, and the Department, as applicable; or the execution of a settlement agreement between the insurer, the claimant, the loss payee, and the Department, as applicable.
(c) If an insurer fails to pay a claim within the applicable time period set forth in subsection (b) of this section or any other time period provided by statute, it shall thereafter pay interest on the amount of the claim at the judgment rate allowed by law. Interest shall accrue from 30 days after the date the insurer receives a properly executed proof of loss. (Added 2019, No. 103 (Adj. Sess.), § 15.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3665b. Timely payment of life insurance claims and annuity death benefits; interest

§ 3665b. Timely payment of life insurance claims and annuity death benefits; interest
(a) This section applies to policies of life insurance and contracts of annuity. As used in this section, a “beneficiary” means any person making a claim against a policy of life insurance or for death benefits provided under a contract of annuity.
(b) A claim for payment of benefits under a policy of life insurance shall be paid within 30 days after the date that a properly executed proof of loss is received by the insurer. All payments of claims under policies of life insurance shall include interest accrued from the date of death of the insured to the date of payment. The interest rate shall be the rate paid on proceeds left on deposit or six percent, whichever is greater.
(c) A claim for payment of benefits under a contract of annuity shall be paid within 30 days after the date that a properly executed proof of loss is received by the insurer. Payments of claims for death benefit proceeds under contracts of annuity shall include interest at the rate paid for proceeds left on deposit or six percent, whichever is greater. Interest shall accrue and be payable as follows:
(1) For variable annuity contracts subject to the Securities and Exchange Commission’s rules governing the liquidation of account values at the death of the beneficiary, from the eighth day following the date that a properly executed proof of loss is received by the insurer.
(2) For all other contracts of annuity, from the date of death of the measuring life, unless the contract specifies that the contract remains in force until the date that a properly executed proof of loss is received by the insurer. For purposes of this section, the individual whose death triggers the death benefit proceeds is the measuring life.
(d) If a claim is contested, it shall be paid within 30 days after the entry of a final nonappealable judgment against the insurer; the entry of a binding arbitration decision between the insurer, the beneficiary, and the Department, as applicable; or the execution of a settlement agreement between the insurer, the beneficiary, and the Department, as applicable.
(e) If an insurer fails to pay a claim within the applicable time period set forth in subsection (b), (c), or (d) of this section, it shall thereafter pay interest on the amount of the claim at the judgment rate allowed by law. Interest shall accrue from 30 days after the date the insurer receives a properly executed proof of loss. (Added 2019, No. 103 (Adj. Sess.), § 16.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3665c. Damages

§ 3665c. Damages
An insurance company, including a society and an association, is responsible for payment of any consequential damages, including all penalties or costs, caused by improper delay in payment or settlement of claims to claimants, loss payees, or beneficiaries under policies of insurance subject to section 3665a or 3665b of this title. Consequential damages for improper delay are not applicable when a policy expressly provides for periodic payments or when a claimant, loss payee, or beneficiary agrees to accept periodic payments, unless an insurer improperly delays making such periodic payments. (Added 2019, No. 103 (Adj. Sess.), § 17.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3666. Rules; methods of notice

§ 3666. Rules; methods of notice
Notwithstanding the requirements under sections 3883, 4226, and 4714 of this title, the Commissioner of Financial Regulation shall adopt rules specifying the methods by which a notice to a party required under section 3880, 3881, 4224, 4225, 4712, or 4713 of this title shall be given. (Added 2013, No. 199 (Adj. Sess.), § 68.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3671. Disclosure of information

§ 3671. Disclosure of information
(a) Upon written request, an insurance company, its agents, adjusters, or brokers, shall furnish to a law enforcement officer, State’s Attorney, or the Attorney General any and all information pertaining to a fire loss under investigation, including:
(1) pertinent insurance policy information relevant to a fire loss under investigation and any application for such a policy;
(2) policy premium payment records which are available;
(3) history of previous claims made by the insured;
(4) material relating to the investigation of the loss, including statements of any person, proof of loss, and any other evidence relevant to the investigation.
(b) When an insurance company, its agents, adjusters, or brokers have reason to believe that a fire loss in which it has an interest may be of other than accidental cause, then for the purpose of notification and for having that fire loss investigated, the company, its agents, adjusters, or brokers shall notify the State Fire Marshal in writing, and provide him or her with any material developed during the inquiry into the fire loss. (Added 1981, No. 73, eff. May 4, 1981.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3672. Immunity

§ 3672. Immunity
An insurance company, its agents, adjusters, or brokers shall be immune from civil liability as a result of the furnishing in good faith of information to any law enforcement officer, State’s Attorney or the Attorney General in accordance with the provisions of section 3671 of this title. (Added 1981, No. 73, eff. May 4, 1981.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3673. Penalty for noncompliance

§ 3673. Penalty for noncompliance
In the event that an insurance company, its agents, adjusters, or brokers fail to comply with the provisions of section 3671 of this title, the Commissioner may suspend the right of the company to do business in this State until it does so comply and shall suspend the license of any agent, adjuster, or broker until such time as they comply with the provisions of section 3671. (Added 1981, No. 73, eff. May 4, 1981.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3691. Receivership

§ 3691. Receivership
Whenever it appears to the Commissioner that any person has committed a violation of this subchapter which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders, or the public, then the Commissioner may proceed as provided in chapter 145 of this title. (Added 1971, No. 72, § 2; amended 1993, No. 12, § 7, eff. April 26, 1993.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3692. Revocation, suspension, or nonrenewal of insurer’s license

§ 3692. Revocation, suspension, or nonrenewal of insurer’s license
Whenever it appears to the Commissioner that any person has committed a violation of this subchapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the Commissioner may, after giving notice and an opportunity to be heard, determine to suspend, revoke, or refuse to renew such insurer’s license or authority to do business in this State for such period as he or she finds is required for the protection of policyholders or the public. Any such determination shall be accompanied by specific findings of fact and conclusions of law. (Added 1971, No. 72, § 2.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3693. Judicial review

§ 3693. Judicial review
(a) Any person aggrieved by any act, determination, rule, regulation, or order or any other action of the Commissioner pursuant to this subchapter may appeal therefrom to the Superior Court. The Court shall conduct its review without a jury and by trial de novo, except that if all parties, including the Commissioner, so stipulate, the review shall be confined to the record. Portions of the record may be introduced by stipulation into evidence in a trial de novo as to those parties so stipulating.
(b) The filing of an appeal pursuant to this section shall stay the application of any such rule, regulation, order or other action of the Commissioner to the appealing party unless the Court, after giving such party notice and an opportunity to be heard, determines that such a stay would be detrimental to the interests of policyholders, shareholders, creditors, or the public.
(c) Any person aggrieved by any failure of the Commissioner to act or make a determination required by this subchapter may file a complaint in the Superior Court for an order directing the Commissioner to act or make such determination forthwith. (Added 1971, No. 72, § 2; amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3694. Recovery

§ 3694. Recovery
(a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer where the distribution or payment pursuant to subdivision (1) or (2) of this subsection is made at any time during the one year preceding the petition for liquidation, conservation, or rehabilitation, as the case may be, subject to the limitations of subsections (b), (c) and (d) of this section:
(1) from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions (other than distributions of shares of the same class of stock) paid by the insurer on its capital stock; or
(2) any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or its subsidiaries to a director, officer, or employee.
(b) No such distribution shall be recoverable if the parent or affiliate shows that when paid such distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that such distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.
(c) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time such distributions were paid shall be liable up to the amount of distributions or payments under subsection (a) of this section received by such person. Any person who otherwise controlled the insurer at the time such distributions were declared shall be liable up to the amount of distributions he or she would have received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.
(d) The maximum amount recoverable under this section shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
(e) To the extent that any person liable under subsection (c) of this section is insolvent or otherwise fails to pay claims due from it pursuant to such subsection, its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from the person liable under subsection (c) of this section. (Added 1991, No. 101, § 17.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 101 - Insurance Companies Generally › § 3695. Supervisory colleges

§ 3695. Supervisory colleges
(a) Power of Commissioner. With respect to any insurer registered under section 3684 of this title and in accordance with subsection (c) of this section, the Commissioner shall also have the power to participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer with this chapter. The powers of the Commissioner with respect to supervisory colleges include the following:
(1) initiating the establishment of a supervisory college;
(2) clarifying the membership and participation of other supervisors in the supervisory college;
(3) clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;
(4) coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and
(5) establishing a crisis management plan.
(b) Expenses. Each registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the Commissioner’s participation in a supervisory college in accordance with subsection (c) of this section, including reasonable travel expenses. For purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the Commissioner may establish a regular assessment on the insurer for the payment of these expenses.
(c) Supervisory college. In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes and as part of the examination of individual insurers in accordance with section 3686 of this chapter, the Commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal, and international regulatory agencies. The Commissioner may enter into agreements in accordance with subsection 3687(c) of this chapter providing the basis for cooperation between the Commissioner and the other regulatory agencies and the activities of the supervisory college. Nothing in this section shall delegate to the supervisory college the authority of the Commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction. (Added 2013, No. 29, § 35, eff. May 13, 2013, eff. May 13, 2013.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3700. Statutory purposes

§ 3700. Statutory purposes
The statutory purpose of the exemption for annuity considerations in section 3718 of this title is to avoid reciprocity from other states. (Added 2013, No. 200 (Adj. Sess.), § 17.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3701. Discriminations prohibited

§ 3701. Discriminations prohibited
A life insurance company doing business in the State shall not make or permit to be made any distinction or unfair discrimination between individual insureds of the same class and of equal expectation of life as to:
(1) the amount of the premiums or the terms of payment thereof; or
(2) the rate charged for policies of life or endowment insurance, or
(3) the dividends or other benefits payable thereon; or
(4) any of the terms and conditions of the policies it issues. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 1, § 1).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3702. Other prohibited practices

§ 3702. Other prohibited practices
A life insurance company doing business in the State or an agent thereof shall not:
(1) issue a policy of insurance or make an agreement other than that plainly expressed in the policy issued to the insured;
(2) pay or allow, or offer to pay or allow, as an inducement to insurance, a rebate or premium payable on the policy;
(3) grant a special favor or advantage in the dividends or other benefits to accrue thereon; or
(4) provide any valuable consideration or inducement not specified in the policy. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 1, § 2).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3703. Penalties

§ 3703. Penalties
A person violating sections 3701 and 3702 of this title may be subject to an administrative penalty of not more than $2,000.00; and the license of such person or company may be suspended by the Commissioner for not less than three months nor more than six months, and for a second offense such license shall be revoked. Such person or company shall not thereafter be licensed for one year from the date of such revocation. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 1, § 3); amended 1995, No. 167 (Adj. Sess.), § 7.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3704. Trust agreements

§ 3704. Trust agreements
A life insurance company chartered by and doing business in this State shall have power and authority to hold in trust or otherwise the proceeds of any life insurance policy or annuity issued by it upon such terms and subject to such conditions and limitations as may be agreed upon in writing by such company and the owner of the policy or the purchaser of the annuity. The contract, policy, or trust instrument may provide that no payments of interest or of principal shall be in any way subject to the claims of the creditors of the person entitled to any part of the proceeds so held or to his or her debts, contracts, or engagements, or to any judicial process to levy upon or attach such proceeds for payment of such claims or demands, and that the person entitled to any of the proceeds so held shall not be permitted to commute, anticipate, encumber, alienate, or assign the same or any part thereof or the interest thereon. Such life insurance company shall not be required to segregate the funds so held but may hold them as a part of its general corporate assets. Nothing in this section or in the trust or other provisions herein contemplated shall subject such life insurance company to the provisions of the law of this State relative to banks or trust companies. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 1, § 4).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3705. Spendthrift provisions; creditors of beneficiary

§ 3705. Spendthrift provisions; creditors of beneficiary
When a contract of annuity, a policy of insurance, or other contract of a life insurance company authorized to do business in this State is entered into with any person for the benefit of another, and such contract so provides, a beneficiary entitled to any of the proceeds retained thereunder by such company or to interest thereon shall not be permitted to commute, anticipate, encumber, alienate, or assign the principal or interest thereon, or any part thereof, nor, if such contract so provides, shall any part of such principal or interest be subject to the claims of creditors of any such beneficiary, nor be in any way subject to such beneficiary’s debts, contracts, or engagements, or to any judicial process to levy upon or attach such proceeds for payment of such claims or demands. Contracts so providing shall be valid and enforceable. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 1, § 5).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3706. Exemption of proceeds—Life insurance

§ 3706. Exemption of proceeds—Life insurance
(a) If a policy of insurance, whether heretofore or hereafter issued, is effected by any person on his or her own life, or on another life, in favor of a person other than himself or herself, or, except in cases of transfer with intent to defraud creditors, if a policy of life insurance is assigned or in any way made payable to any such person, the lawful beneficiary or assignee thereof, other than the insured or the person so effecting such insurance or executors or administrators of such insured or the person so effecting such insurance, shall be entitled to its proceeds and avails against the creditors and representatives of the insured and of the person effecting the same, whether or not the right to change the beneficiary is reserved or permitted, and whether or not the policy is made payable to the person whose life is insured if the beneficiary or assignee shall predecease such person, and such proceeds and avails shall be exempt from all liability for any debt of the beneficiary existing at the time the policy is made available for his or her use: Provided, that subject to the statute of limitations, the amount of any premiums for such insurance paid with intent to defraud creditors, with interest thereon, shall inure to their benefit from the proceeds of the policy; but the insurer issuing the policy shall be discharged of all liability thereon by payment of its proceeds in accordance with its terms, unless, before such payment, the insurer shall have received written notice at its home office, by or in behalf of a creditor, of a claim to recover for transfer made or premiums paid with intent to defraud creditors, with specification of the amount claimed along with such facts as will assist the insurer to identify the particular policy.
(b) For the purposes of subsection (a) of this section, a policy shall also be deemed to be payable to a person other than the insured if and to the extent that a facility-of-payment clause or similar clause in the policy permits the insurer to discharge its obligation after the death of the individual insured by paying the death benefits to a person as permitted by such clause. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 1, § 6).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3707. Disability benefits

§ 3707. Disability benefits
Except as may otherwise be expressly provided by the policy or contract, the proceeds or avails of all policies or contracts providing benefits on account of the insured’s disability which are supplemental to life insurance or annuity contracts heretofore or hereafter effected shall be exempt from all liability for any debt of the insured, and from any debt of the beneficiary existing at the time the proceeds are made available for his or her use. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 1, § 7).)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 103 - Life Insurance Policies and Annuity Contracts › § 3708. Group insurance

§ 3708. Group insurance
(a) A policy of group life insurance or group disability insurance or the proceeds thereof payable to the individual insured or to the beneficiary thereunder, shall not be liable, either before or after payment, to be applied by any process to pay any debt or liability of such insured individual or his or her beneficiary or of any other person having a right under the policy. The proceeds thereof, when not made payable to a named beneficiary or to a third person pursuant to a facility-of-payment clause, shall not constitute a part of the estate of the individual insured for the payment of his or her debts.
(b) This section shall not apply to group insurance issued to a creditor covering his or her debtors, to the extent that such proceeds are applied to payment of the obligation for the purpose of which the insurance was so issued. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 1, § 8).)