The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 101 : Insurance Companies Generally

Subchapter 013 : HOLDING COMPANIES AND SUBSIDIARIES

• § 3689. Injunctions; prohibitions against voting securities; sequestration of voting securities

  (a) Injunctions. Whenever it appears to the Commissioner that any insurer or any director, officer, employee, or agent thereof has committed or is about to commit a violation of this subchapter or of any rule, regulation, or order issued by the Commissioner hereunder, the Commissioner may apply to the Superior Court for the county in which the principal office of the insurer is located or if such insurer has no such office in this State then to the Superior Court for Washington County for an order enjoining such insurer or such director, officer, employee, or agent thereof from violating or continuing to violate this subchapter or any such rule, regulation or order, and for such other equitable relief as the nature of the case and the interests of the insurer’s policyholders, creditors, and shareholders or the public may require.

  (b) Voting of securities, when prohibited. No security which is the subject of any agreement regarding acquisition, or which is acquired or to be acquired, in contravention of the provisions of this subchapter or of any rule, regulation or order issued by the Commissioner hereunder may be voted at any shareholders’ meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though such securities were not issued and outstanding; but no action taken at any such meeting shall be invalidated by the voting of such securities, unless the action would materially affect control of the insurer or unless the courts of this State have so ordered. If an insurer or the Commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this subchapter or of any rule, regulation or order issued by the Commissioner hereunder the insurer or the Commissioner may apply to the Superior Court for the county in which the insurer has its principal place of business or to the Superior Court for Washington County to enjoin any offer, request, invitation, agreement or acquisition made in contravention of section 3685 of this title or any rule, regulation, or order issued by the Commissioner thereunder to enjoin the voting of any security so acquired, to void any vote of such security already cast at any meeting of shareholders, and for such other equitable relief as the nature of the case and the interests of the insurer’s policyholders, creditors and shareholders or the public may require.

  (c) Sequestration of voting securities. In any case where a person has acquired or is proposing to acquire any voting securities in violation of this subchapter or any rule, regulation, or order issued by the Commissioner hereunder, the Superior Court for the county in which the insurer has its principal place of business or the Superior Court of Washington County may, on such notice as the court deems appropriate, upon the application of the insurer or the Commissioner, seize or sequester any voting securities of the insurer owned directly or indirectly by such person, and issue such orders with respect thereto as may be appropriate to effectuate the provisions of this subchapter. Notwithstanding any other provisions of law, for the purposes of this subchapter the situs of the ownership of the securities of domestic insurers shall be deemed to be in this State. (Added 1971, No. 72, § 2; amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)