(a)Except as provided in subsection 8204(f) of this title, the Commissioner shall approve all forms used by an insurer in a transaction under this subchapter, including the notice of transfer, the assumption contract, any related reinsurance or indemnity contract, the proposed assumption certificate, and any proposed premium or other notice proposed to give notice of and to reserve a policyholder’s right to make premium payments without consenting to the assumption or transfer.
(b)If an insurer domiciled in this State or in a jurisdiction having a substantially similar law is deemed by the domiciliary commissioner to be in hazardous financial condition or an administrative proceeding has been instituted against it for the purpose of reorganizing or conserving the insurer, and the transfe
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(a) Except as provided in subsection 8204(f) of this title, the Commissioner shall approve all forms used by an insurer in a transaction under this subchapter, including the notice of transfer, the assumption contract, any related reinsurance or indemnity contract, the proposed assumption certificate, and any proposed premium or other notice proposed to give notice of and to reserve a policyholder’s right to make premium payments without consenting to the assumption or transfer.
(b) If an insurer domiciled in this State or in a jurisdiction having a substantially similar law is deemed by the domiciliary commissioner to be in hazardous financial condition or an administrative proceeding has been instituted against it for the purpose of reorganizing or conserving the insurer, and the transfer of the contracts of insurance is in the best interests of the policyholders, as determined by the domiciliary commissioner, a transfer and novation may be effected notwithstanding the provisions of this chapter to the contrary. The Commissioner shall approve the transfer and the form of notice to policyholders, that shall describe the circumstances that require the transfer. The Commissioner may, in the Commissioner’s discretion, permit assumption based on implied consent.
(c) Any insurer failing, without just cause, to file timely any form as required in this chapter shall be required to pay a penalty of not more than $10,000.00 for each form, with a maximum penalty of $100,000.00. In assessing any penalty under this provision, the Commissioner shall consider whether the violation was willful, the amount of the violator’s gain, the damages to Vermont policyholders, the remedial actions taken by the violator, and any other factors the Commissioner finds relevant. The Commissioner may void any transfer and restore the status quo if the transfer was not approved in accordance with section 8204 of this title. In determining whether to void a transfer, the Commissioner shall consider the interests of policyholders, creditors, and the public. Insurers charged with a violation of this chapter shall be entitled to notice and an opportunity to be heard in accordance with 3 V.S.A. chapter 25. No private right of action shall arise from this section.
(d) In the case of policyholders who do not reside in this State, and where the insurance regulatory authority in such other state has approved or intends to approve the notice requirements and other policyholder rights with respect to such policyholders, the Commissioner shall defer to the decisions of such other insurance regulatory authority. In the case of policyholders who do not reside in this State, and where the insurance regulatory authority in such other state has not established an obligation to file forms used by an insurer in a transaction under this subchapter, the Commissioner may modify notice requirements and other policyholder rights when in his or her judgment it appears that the interests of the policyholders and insurers are best served by the exercise of such discretion. Factors to be considered in making this determination shall include the following:
(1) the existence of duplicative or conflicting requirements in other jurisdictions;
(2) the number of Vermont policyholders affected by a proposed assumption transaction;
(3) the number of states that have adopted assumption reinsurance requirements substantially similar to those set forth in this chapter;
(4) the impact of the assumption reinsurance transaction on the insurance companies involved in a transaction;
(5) the possibility of adverse consequences to policyholders choosing to opt out of an assumption transaction;
(6) the possibility of adverse consequences to policyholders if a significant number of other policyholders opt out of the transaction;
(7) the economic consequences of imposing notice and policyholder rights provisions on Vermont domestic insurance companies; and
(8) such other factors that the Commissioner deems to be relevant.
(e) The Commissioner may modify or waive the notice, consent, and other requirements of this chapter where the transfer of the obligations or risks on contracts of insurance pursuant to an assumption reinsurance agreement is part of a voluntary plan of dissolution by the transferring insurer and where the Commissioner is satisfied the transfer will adequately protect the interests of the affected policyholders. (Added 1993, No. 235 (Adj. Sess.), § 7; amended 1995, No. 58, § 1; 2005, No. 36, § 16, eff. June 1, 2005; 2009, No. 137 (Adj. Sess.), § 7g; 2021, No. 105 (Adj. Sess.), § 270, eff. July 1, 2022.)