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2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7069. Setoffs

§ 7069. Setoffs
(a) Mutual debts or mutual credits whether arising out of one or more contracts between the insurer and another person in connection with any action or proceeding under this chapter shall be set off and the balance only shall be allowed or paid, except as provided in subsections (b) and (c) of this section and section 7072 of this title.
(b) No setoff or counterclaim shall be allowed in favor of any person where:
(1) the obligation of the insurer to the person would not at the date of the filing of a petition for liquidation entitle the person to share as a claimant in the assets of the insurer;
(2) the obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff;
(3) the obligation of the insurer is owed to an affiliate of such person, or any other entity or association other than the person;
(4) the obligation of the person is owed to an affiliate of the insurer, or any other entity or association other than the insurer;
(5) the obligation of the person is to pay an assessment levied against the members or subscribers of the insurer, or is to pay a balance upon a subscription to the capital stock of the insurer, or is in any other way in the nature of a capital contribution;
(6) the obligation of the person is to pay to the insurer sums held in a fiduciary capacity for the insurer; or
(7) the person alone or together with any other member of its insurance company holding system owns 50 percent or more of the voting stock of the insurer.
(c) The receiver shall provide persons with accounting statements identifying debts that are currently due and payable. Where a person owes to the insurer currently due and payable balances, against which the person asserts setoff of mutual credits which may become due and payable from the insurer in the future, the person shall promptly pay to the receiver the currently due and payable amount, provided that, notwithstanding section 7081 of this title, the receiver shall promptly and fully refund, to the extent of the person’s prior payments, any mutual credits that become due and payable to the person by the insurer. (Added 1991, No. 45, § 2, eff. date, see note set below.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7070. Assessments

§ 7070. Assessments
(a) As soon as practicable but not more than two years from the date of an order of liquidation under section 7057 of this title of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth:
(1) the reasonable value of the assets of the insurer;
(2) the insurer’s probable total liabilities;
(3) the probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment; and
(4) a recommendation as to whether or not an assessment should be made and in what amount.
(b)(1) Upon the basis of the report provided in subsection (a) of this section, including any supplements and amendments, the Superior Court of Washington County may levy one or more assessments against all members of the insurer who are subject to assessment.
(2) Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration, and the estimated cost of collection of the assessment exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically.
(c) After levy of assessment under subsection (b) of this section, the liquidator shall issue an order directing each member who has not paid the assessment pursuant to the order to show cause why the liquidator should not pursue a judgment for such assessment.
(d) The liquidator shall give notice of the order to show cause by publication and by first-class mail to each member liable under the order mailed to the member’s last known address as it appears on the insurer’s records, at least 20 days before the return day of the order to show cause.
(e)(1) If a member does not appear and serve duly verified objections upon the liquidator on or before the return day of the order to show cause under subsection (c) of this section, the court shall make an order adjudging the member liable for the amount of the assessment against the member pursuant to subsection (c) of this section, together with costs, and the liquidator shall have a judgment against the member for the assessment.
(2) If on or before such return day, the member appears and serves duly verified objections upon the liquidator, the Commissioner may hear and determine the matter or may appoint a referee to hear it and make such order as the facts warrant. In the event that the Commissioner determines that such objections do not warrant relief from assessment, the member may request the court to review the matter and vacate the order to show cause.
(f) The liquidator may enforce any order or collect any judgment under subsection (e) of this section by any lawful means. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2021, No. 105 (Adj. Sess.), § 257, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7071. Reinsurer’s liability

§ 7071. Reinsurer’s liability
The amount recoverable by the liquidator from reinsurers shall not be reduced as a result of the delinquency proceedings, regardless of any provision in the reinsurance contract or other agreement. Payment made directly to an insured or other creditor shall not diminish the reinsurer’s obligation to the insurer’s estate except when the reinsurance contract provided for direct coverage of a named insured and the payment was made in discharge of that obligation. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7072. Recovery of premiums owed

§ 7072. Recovery of premiums owed
(a)(1) An agent, broker, premium finance company, or any other person, other than the insured, responsible for the payment of a premium shall be obligated to pay any unpaid premium for the full policy term due the insurer at the time of the declaration of insolvency, or the inception of the receivership, whichever is sooner, whether earned or unearned, as shown on the records of the insurer. The liquidator shall also have the right to recover from such person any part of an unearned premium that represents commission of such person. Credits or setoffs, or both shall not be allowed to an agent, broker, or premium finance company for any amounts advanced to the insurer by the agent, broker, or premium finance company on behalf of, but in the absence of a payment by, the insured.
(2) An insured shall be obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency, or the inception of the receivership, whichever is sooner, as shown on the records of the insurer.
(b) Upon satisfactory evidence of a violation of this section, the Commissioner may pursue either one or both of the following courses of action:
(1) Suspend or revoke or refuse to renew the licenses of such offending party or parties.
(2) Impose a penalty of not more than $1,000.00 for each and every act in violation of this section by said party or parties.
(c) Before the Commissioner shall take any action as set forth in subsection (b) of this section, he or she shall give written notice to the person, company, association, or exchange accused of violating the law, stating specifically the nature of the alleged violation and fixing a time and place, at least ten days thereafter, when a hearing on the matter shall be held. After hearing, or upon failure of the accused to appear at the hearings, the Commissioner, if he or she shall find a violation, shall impose one or both of the penalties provided by subsection (b) of this section as he or she deems advisable.
(d) When the Commissioner shall take action in any or all of the ways set out in subsection (b) of this section, the party aggrieved may appeal the Commissioner’s decision to the Supreme Court. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7074. Filing of claims

§ 7074. Filing of claims
(a) Proof of all claims shall be filed with the liquidator in the form required by section 7075 of this title on or before the last day for filing specified in the notice required under section 7061 of this title, except that proof of claims for cash surrender values or other investment values in life insurance and annuities need not be filed unless the liquidator expressly so requires.
(b) The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if he or she were not late, to the extent that any such payment will not prejudice the orderly administration of the liquidation, under the following circumstances:
(1) the existence of the claim was not known to the claimant and he or she filed the claim as promptly thereafter as reasonably possible after learning of it;
(2) a transfer to a creditor was avoided under sections 7065 through 7067 of this title, or was voluntarily surrendered under section 7068 of this title, and the filing satisfies the conditions of section 7068 of this title; or
(3) the valuation under section 7080 of this title, of security held by a secured creditor shows a deficiency, which is filed within 30 days after the valuation.
(c) The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if such claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing where such payments were made and expenses incurred as provided by law.
(d) The liquidator may consider any claim filed late that is not covered by subsection (b) of this section, and permit it to receive distributions that are subsequently declared on any claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The late-filing claimant shall receive, at each distribution, the same percentage of the amount allowed on his or her claim as is then being paid to claimants of any lower priority. This shall continue until his or her claim has been paid in full. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7075. Proof of claim

§ 7075. Proof of claim
(a) Proof of claim shall consist of a statement signed by the claimant that includes all the following that are applicable:
(1) the particulars of the claim including the consideration given for it;
(2) the identity and amount of the security on the claim;
(3) the payments made on the debt, if any;
(4) that the sum claimed is justly owing and that there is no setoff, counterclaim, or defense to the claim;
(5) any right of priority of payment or other specific right asserted by the claimants;
(6) a copy of the written instrument that is the foundation of the claim; and
(7) the name and address of the claimant and his or her attorney.
(b) No claim need be considered or allowed if it does not contain all the information in subsection (a) of this section. The liquidator may require that a prescribed form be used, and may require that other information and documents be included.
(c) At any time the liquidator may request the claimant to present information or evidence supplementary to that required under subsection (a) of this section and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence.
(d) No judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation, and no judgment or order against an insured or the insurer entered at any time by default or by collusion need be considered as evidence of liability or of quantum of damages. No judgment or order against an insured or the insurer entered within four months before the filing of the petition need be considered as evidence of liability or of the quantum of damages.
(e) All claims of a guaranty association or foreign guaranty association shall be in such form and contain such substantiation as may be agreed to by the association and the liquidator. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7076. Special claims

§ 7076. Special claims
(a) The claim of a third party that is contingent only on his or her first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency.
(b) A claim may be allowed even if contingent, if it is filed in accordance with section 7074 of this title. It may be allowed and the claimant may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation.
(c) Claims that are due except for the passage of time shall be treated as absolute claims are treated, except that such claims may be discounted at the legal rate of interest.
(d) Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar functions or having similar powers are limited to payment for services rendered prior to the issuance of any order of rehabilitation or liquidation under section 7052 or 7057 of this title. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7077. Special provisions for third-party claims

§ 7077. Special provisions for third-party claims
(a) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator.
(b) Whether or not the third party files a claim, the insured may file a claim on his or her own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within 60 days after mailing of the notice required by section 7061 of this title, whichever is later, the insured is an unexcused late filer.
(c)(1) The liquidator shall make recommendations to the court under section 7082 of this title, for the allowance of an insured’s claim under subsection (b) of this section after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action, and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, he or she shall reconsider the claim on the basis of additional information and amend his or her recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of:
(A) the amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense; or
(B) the amount allowed on the claims by the court.
(2) After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection shall not be a reason for unreasonable delay of final distribution and discharge of the liquidator.
(d) If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as under subsection (c) of this section. If any insured’s claim is subsequently reduced under subsection (c) of this section, the amount thus freed shall be apportioned ratably among the claims that have been reduced under this subsection.
(e) No claim may be presented under this section if it is or may be covered by any guaranty association or foreign guaranty association. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7078. Disputed claims

§ 7078. Disputed claims
(a) When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or the claimant’s attorney by first-class mail at the address shown in the proof of claim. Within 60 days from the mailing of the notice, the claimant may file objections with the liquidator. If no such filing is made, the claimant may not further object to the determination.
(b) Whenever objections are filed with the liquidator and the liquidator does not alter his or her denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first-class mail to the claimant or the claimant’s attorney and to any other persons directly affected, not less than ten nor more than 30 days before the date of the hearing. The matter may be heard by the court or by a court-appointed referee who shall submit findings of fact along with a recommendation. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7079. Claims of surety

§ 7079. Claims of surety
Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor’s name, and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor’s name, to the extent that he or she discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution, until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer’s estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by him or her in trust for such other person. The term “other person,” as used in this section, does not apply to a guaranty association or foreign guaranty association. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7080. Secured creditor’s claims

§ 7080. Secured creditor’s claims
(a) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct:
(1) by converting the same into money according to the terms of the agreement pursuant to which the security was delivered to such creditors; or
(2) by agreement, arbitration, compromise, or litigation between the creditor and the liquidator.
(b) The determination made under subsection (a) of this section shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim, and any deficiency shall be treated as an unsecured claim. If the claimant shall surrender his or her security to the liquidator, the entire claim shall be allowed as if unsecured. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7082. Liquidator’s recommendations to the court

§ 7082. Liquidator’s recommendations to the court
(a) The liquidator shall review all claims duly filed in the liquidation and shall make such further investigation as he or she shall deem necessary. He or she may compound, compromise, or in any other manner negotiate the amount for which claims will be recommended to the court except where the liquidator is required by law to accept claims as settled by any person or organization, including any guaranty association or foreign guaranty association. Unresolved disputes shall be determined under section 7078 of this title. As soon as practicable, the liquidator shall present to the court a report of the claims against the insurer with recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment value and the amounts owed.
(b) The court may approve, disapprove, or modify the report on claims by the liquidator. Reports that are not modified by the court within a period of 60 days following submission by the liquidator shall be treated by the liquidator as allowed claims, subject to later modification or to rulings made by the court pursuant to section 7078 of this title. No claim under a policy of insurance shall be allowed for an amount in excess of the applicable policy limits. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7083. Distribution of assets

§ 7083. Distribution of assets
Under the direction of the court, the liquidator shall pay distributions in a manner that will ensure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third-party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2021, No. 105 (Adj. Sess.), § 259, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7084. Unclaimed and withheld funds

§ 7084. Unclaimed and withheld funds
(a) All unclaimed funds subject to distribution remaining in the liquidator’s hands when the liquidator is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member, or other person who is unknown or cannot be found, shall be deposited with the State Treasurer and shall be paid without interest except in accordance with section 7081 of this title to the person entitled to such funds or to the person’s legal representative upon proof satisfactory to the State Treasurer of the person’s right to the funds. Any amount on deposit not claimed within seven years from the discharge of the liquidator shall be deemed to have been abandoned and shall be escheated without formal escheat proceedings and be deposited with the General Fund.
(b) All funds withheld under section 7077 of this title and not distributed shall upon discharge of the liquidator be deposited with the State Treasurer and paid by him or her in accordance with section 7077 of this title. Any sums remaining that under section 7077 of this title would revert to the undistributed assets of the insurer shall be transferred to the State Treasurer and become the property of the State under subsection (a) of this section, unless the Commissioner in his or her discretion petitions the court to reopen the liquidation under section 7086 of this title. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2021, No. 105 (Adj. Sess.), § 260, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7085. Termination of proceedings

§ 7085. Termination of proceedings
(a) When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any remaining funds that are uneconomic to distribute, as may be deemed appropriate.
(b) Any other person may apply to the court at any time for an order under subsection (a) of this section. If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including reasonable attorney’s fees. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7086. Reopening liquidation

§ 7086. Reopening liquidation
After the liquidation proceeding has been terminated and the liquidator discharged, the Commissioner or other interested party may at any time petition the Superior Court of Washington County to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7087. Disposition of records during and after termination of liquidation

§ 7087. Disposition of records during and after termination of liquidation
Whenever it shall appear to the Commissioner that the records of any insurer in process of liquidation or completely liquidated are no longer useful and are no longer required by law to be retained, the Commissioner may recommend to the court and the court shall direct what records should be retained for future reference and what should be destroyed. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7088. External audit of the receiver’s books

§ 7088. External audit of the receiver’s books
The Superior Court of Washington County may, as it deems desirable, cause audits to be made of the books of the Commissioner relating to any receivership established under this chapter, and a report of each audit shall be filed with the Commissioner and with the court. The books, records, and other documents of the receivership shall be made available to the auditor at any time without notice. The expense of each audit shall be considered a cost of administration of the receivership. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7091. Conservation of property of foreign or alien insurers found in this State

§ 7091. Conservation of property of foreign or alien insurers found in this State
(a) If a domiciliary liquidator has not been appointed, the Commissioner may apply to the Superior Court of Washington County by verified petition for an order directing the Commissioner to act as conservator to conserve the property of an alien insurer not domiciled in this State or a foreign insurer on any one or more of the following grounds:
(1) any of the grounds established by section 7051 of this title;
(2) any of the insurer’s property has been sequestered by official action in its domiciliary state, or in any other state;
(3) enough of the insurer’s property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent;
(4)(A) the insurer’s certificate of authority to do business in this State has been revoked or none was ever issued; and
(B) there are residents of this State with outstanding claims or outstanding policies.
(b) When an order is sought under subsection (a) of this section, the court shall cause the insurer to be given such notice and time to respond to the order as is reasonable under the circumstances.
(c) The court may issue the order in whatever terms it shall deem appropriate. The filing or recording of the order with the Superior Court of Washington County or the town clerk of the town in which the principal business of the company is located shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that town clerk would have imparted.
(d) The conservator may at any time petition for and the court may grant an order under section 7092 of this title to liquidate assets of a foreign or alien insurer under conservation or, if appropriate, for an order under section 7094 of this title, to be appointed ancillary receiver.
(e) The conservator may at any time petition the court for an order terminating conservation of an insurer. If the court finds that the conservation is no longer necessary, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also make such finding and issue such order at any time upon motion of any interested party, but if such motion is denied, all costs, including reasonable attorney’s fees, shall be assessed against such party. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2021, No. 105 (Adj. Sess.), § 261, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7092. Liquidation of property of foreign or alien insurers found in this State

§ 7092. Liquidation of property of foreign or alien insurers found in this State
(a) If no domiciliary receiver has been appointed, the Commissioner may apply to the Superior Court of Washington County by verified petition for an order directing the Commissioner to liquidate the assets found in this State of a foreign insurer or an alien insurer not domiciled in this State, on any of the following grounds:
(1) any of the grounds established in section 7051 or 7056 of this title; or
(2) any of the grounds established in subdivisions 7091(a)(2) through (4) of this title.
(b) When an order is sought under subsection (a) of this section, the court shall cause the insurer to be given such notice and time to respond to the order as is reasonable under the circumstances.
(c) If it shall appear to the court that the best interests of creditors, policyholders, and the public require, the court may issue an order to liquidate in whatever terms it shall deem appropriate. The filing or recording of the order with the Superior Court of Washington County or the town clerk of the town in which the principal business of the company is located or the town in which its principal office or place of business is located shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that town clerk would have imparted.
(d) If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section, the liquidator under this section shall thereafter act as ancillary receiver under section 7094 of this title. If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section, the liquidator under this section may petition the court for permission to act as ancillary receiver under section 7094 of this title.
(e) On the same grounds as are established in subsection (a) of this section, the Commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer’s assets and business over which the court will exercise jurisdiction, or any lesser part thereof that the Commissioner deems desirable for the protection of the policyholders and creditors in this State.
(f) The court may order the Commissioner, when the Commissioner has liquidated the assets of a foreign or alien insurer under this section, to pay claims of residents of this State against the insurer under such rules as to the liquidation of insurers under this chapter as are otherwise compatible with the provisions of this section. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2021, No. 105 (Adj. Sess.), § 262, eff. July 1, 2022.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7093. Domiciliary liquidators in other states

§ 7093. Domiciliary liquidators in other states
(a) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under subsection 7094(c) of this title, be vested by operation of law with the title to all of the assets, property, contracts, and rights of action, agents’ balances, and all of the books, accounts, and other records of the insurer located in this State. The date of vesting shall be the date of the filing of the petition, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting shall be the date of entry of the order directing possession to be taken. The domiciliary liquidator shall have the immediate right to recover balances due from agents and to obtain possession of the books, accounts, and other records of the insurer located in this State. He or she also shall have the right to recover all other assets of the insurer located in this State, subject to section 7094 of this title.
(b) If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the Commissioner of this State shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books, accounts, and other records of the insurer located in this State, at the same time that the domiciliary liquidator is vested with title in the domicile. The Commissioner of this State may petition for a conservation or liquidation order under section 7091 or 7092 of this title, or for an ancillary receivership under section 7094 of this title, or after approval by the Superior Court of Washington County may transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require.
(c) Claimants residing in this State may file claims with the liquidator or ancillary receiver, if any, in this State or with the domiciliary liquidator, if the domiciliary law permits. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceedings. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7094. Ancillary formal proceedings

§ 7094. Ancillary formal proceedings
(a) If a domiciliary liquidator has been appointed for an insurer not domiciled in this State, the Commissioner may file a petition with the Superior Court of Washington County requesting appointment as ancillary receiver in this State if the Commissioner finds that:
(1) there are sufficient assets of the insurer located in this State to justify the appointment of an ancillary receiver; or
(2) the protection of creditors or policyholders in this State so requires.
(b) The court may issue an order appointing an ancillary receiver in whatever terms it shall deem appropriate. The filing or recording of the order with the Superior Court of Washington County or the town clerk of the town in which its principal office or place of business is located; or, in the case of real estate, with the town clerk of the town where the property is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that town clerk would have imparted.
(c) When a domiciliary liquidator has been appointed in a reciprocal state, then the ancillary receiver appointed in this State may, whenever necessary, aid and assist the domiciliary liquidator in recovering assets of the insurer located in this State. The ancillary receivers shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims that are proved and allowed in the ancillary proceedings in this State, and shall pay the necessary expenses of the proceedings. The ancillary receiver shall promptly transfer all remaining assets, books, accounts, and records to the domiciliary liquidator. Subject to this section, the ancillary receiver and his or her deputies shall have the same powers and be subject to the same duties with respect to the administration of assets as a liquidator of an insurer domiciled in this State.
(d) When a domiciliary liquidator has been appointed in this State, ancillary receivers appointed in reciprocal states shall have, as to assets and books, accounts, and other records in their respective states, corresponding rights, duties, and powers to those provided in subsection (c) of this section for ancillary receivers appointed in this State. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7095. Ancillary summary proceedings

§ 7095. Ancillary summary proceedings
The Commissioner in his or her sole discretion may institute proceedings under subchapter 2 of this chapter at the request of the Commissioner or other appropriate insurance official of the domiciliary state of any foreign or alien insurer having property located in this State. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7096. Claims of nonresidents against insurers domiciled in this State

§ 7096. Claims of nonresidents against insurers domiciled in this State
(a) In a liquidation proceeding begun in this State against an insurer domiciled in this State, claimants residing in foreign countries or in states not reciprocal states must file claims in this State, and claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary liquidator. Claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding.
(b) Claims belonging to claimants residing in reciprocal states may be proved either in the liquidation proceeding in this State as provided in this chapter, or in ancillary proceedings, if any, in the reciprocal states. If notice of the claims and opportunity to appear and be heard is afforded the domiciliary liquidator of this State as provided in subsection 7097(b) of this title with respect to ancillary proceedings, the final allowance of claims by the courts in ancillary proceedings in reciprocal states shall be conclusive as to amount and as to priority against special deposits or other security located in such ancillary states, but shall not be conclusive with respect to priorities against general assets under section 7081 of this title. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7097. Claims of residents against insurers domiciled in reciprocal states

§ 7097. Claims of residents against insurers domiciled in reciprocal states
(a) In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who resides within this State may file claims either with the ancillary receiver, if any, in this State, or with the domiciliary liquidator. Claims must be filed on or before the last dates fixed for the filing of claims in the domiciliary liquidation proceeding.
(b) Claims belonging to claimants residing in this State may be proved either in the domiciliary state under the law of that state, or in ancillary proceedings, if any, in this State. If a claimant elects to prove his or her claim in this State, the claimant shall file the claim with the liquidator in the manner provided in sections 7074 and 7075 of this title. The ancillary receiver shall make his or her recommendation to the court as provided under section 7082 of this title. The ancillary receiver shall also arrange a date for hearing if necessary under section 7078 of this title and shall give notice to the liquidator in the domiciliary state, either by certified mail or by personal service at least 40 days prior to the date set for hearing. If the domiciliary liquidator, within 30 days after the giving of such notice, gives notice in writing to the ancillary receiver and to the claimant, either by certified mail or by personal service, of his or her intention to contest the claim, the domiciliary liquidator shall be entitled to appear or to be represented in any proceeding in this State involving the adjudication of the claim.
(c) The final allowance of the claim by the courts of this State shall be accepted as conclusive as to amount and as to priority against special deposits or other security located in this State. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7098. Attachment, garnishment and levy of execution

§ 7098. Attachment, garnishment and levy of execution
During the pendency in this or any other state of a liquidation proceeding, whether called by that name or not, no action or proceeding in the nature of an attachment, garnishment, or levy of execution shall be commenced or maintained in this State against the delinquent insurer or its assets. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7099. Interstate priorities

§ 7099. Interstate priorities
(a) In a liquidation proceeding in this State involving one or more reciprocal states, the order of distribution of the domiciliary state shall control as to all claims of residents of this and reciprocal states. All claims of residents of reciprocal states shall be given equal priority of payment from general assets regardless of where such assets are located.
(b) The owners of special deposit claims against an insurer for which a liquidator is appointed in this or any other state shall be given priority against the special deposits in accordance with the statutes governing the creation and maintenance of the deposits. If there is a deficiency in any deposit, so that the claims secured by it are not fully discharged from it, the claimants may share in the general assets, but the sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit.
(c) The owner of a secured claim against an insurer for which a liquidator has been appointed in this or any other state may surrender his or her security and file a claim as a general creditor, or the claim may be discharged by resort to the security in accordance with section 7080 of this title, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors. (Added 1991, No. 45, § 2, eff. May 29, 1991.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 145 - Supervision, Rehabilitation, and Liquidation of Insurers › § 7100. Subordination of claims for noncooperation

§ 7100. Subordination of claims for noncooperation
If an ancillary receiver in another state or foreign country, whether called by that name or not, fails to transfer to the domiciliary liquidator in this State any assets within his or her control other than special deposits, diminished only by the expenses of the ancillary receivership, if any, the claims filed in the ancillary receivership, other than special deposit claims or secured claims, shall be placed in the class of claims under subdivision 7081(9) of this title. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2001, No. 71, § 15, eff. June 16, 2001.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 147 - Legacy Insurance Transfers › § 7113. Plan review

§ 7113. Plan review
(a) The Commissioner may retain an actuary to conduct an actuarial study quantifying the liabilities under insurance policies and reinsurance agreements to be transferred to the assuming company under the plan and is authorized to retain any other legal, financial, and examination services from outside the Department necessary to assist in plan review.
(b) In reviewing the plan, the Commissioner shall take into account all written comments filed with respect to the plan, all evidence taken at the hearing, and any other factors the Commissioner reasonably deems relevant with respect to the plan. In all cases, the Commissioner shall make findings with respect to each of the following:
(1) the solvency of the assuming company before and after the implementation of the proposed plan;
(2) the adequacy of the assuming company’s proposals described in the statement required under subdivision 7112(b)(16) of this chapter;
(3) the adequacy of the assuming company’s consent to jurisdiction required under subdivision 7112(b)(17) of this chapter;
(4) the ability of the assuming company to comply with all requirements of the policies and inward reinsurance agreements, including the capacity of the assuming company regarding the administration of claims in process on or after the effective date of the transfer;
(5) whether any outward reinsurance agreement relating to any policy or policies in the closed block will be adversely affected by the transfer;
(6) whether the plan materially adversely affects the interests of any party or outward reinsurance counterparty, including the interests of any policyholder or inward reinsurance counterparty who has accepted or has been deemed to have accepted the plan;
(7) whether policyholders or inward reinsurance counterparties, together with their respective insurance policies and inward reinsurance agreements, have been excluded from the plan as required under subsections 7112(j) and (l) of this chapter; and
(8) the fairness of the plan to all parties. (Added 2013, No. 93 (Adj. Sess.), § 3, eff. Feb. 19, 2014.)
2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 147 - Legacy Insurance Transfers › § 7115. Jurisdiction; appeals

§ 7115. Jurisdiction; appeals
(a) The Commissioner shall have exclusive regulatory jurisdiction with respect to the review and approval or denial of any plan.
(b) Any party aggrieved by a final order of the Commissioner may appeal that order to the Vermont Supreme Court under 3 V.S.A. § 815. (Added 2013, No. 93 (Adj. Sess.), § 3, eff. Feb. 19, 2014.)