The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
Subchapter
013
:
HOLDING COMPANIES AND SUBSIDIARIES
(Cite as: 8 V.S.A. § 3694)
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§ 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.)