§ 4982. Creation of Vermont joint underwriting associations
(a) The Commissioner is hereby authorized, under the terms of this chapter, to establish
one or more Vermont joint underwriting associations. The purpose of any such association
shall be to provide insurance on a self-supporting basis without subsidy from its
members. No such association formed pursuant to this chapter shall be formed for
the purpose of providing coverage for pollution exposures.
(b) Each insurer authorized to write, and engaged in writing within this State, property
and casualty insurance shall be a member of an association established under this
chapter by the Commissioner and shall remain a member as a condition of its authority
to write such insurance within this State, except that the Commissioner may exclude
classes of insurers for administrative convenience or because it is not practicable
to require them to participate.
(c) An association shall be a temporary, nonexclusive, nonprofit unincorporated association
constituting a legal entity separate and distinct from its members. All funds and
reserves of an association shall be separately held and invested.
(d) An association shall not commence or resume after suspension any of its underwriting
operations until the Commissioner, after due hearing and investigation, determines,
and the emergency board approves such determination, that a voluntary market of insurance
does not exist and that a voluntary market assistance plan has failed to restore availability
of the needed insurance coverages. Upon such determination, an association shall
be authorized to engage in the underwriting of any specific line of insurance determined
to be unavailable in the voluntary market. If, after an association commences its
operation, the Commissioner determines that insurance can be made available in the
voluntary market, he or she shall suspend the operation of the association. The Commissioner
may re-establish the association’s operations if he or she finds after due hearing
and investigation that the insurance industry has failed to provide a voluntary market
for the specific line of insurance underwritten through the association.
(e) An association shall, subject to the terms and conditions of this chapter, have power
on behalf of its members to:
(1) Issue, or to cause to be issued, policies of insurance to qualified applicants, including
incidental coverages and subject to limits as specified in the plan of operation.
Coverages under such policies may be made available as primary or excess protection.
(2) Underwrite and otherwise service such policies of insurance and adjust and pay losses
with respect thereto, or appoint service companies or associations to perform those
functions.
(3) Assume or cede 100 percent reinsurance or a lesser percentage on any policy underwritten
by the association. (Added 1985, No. 265 (Adj. Sess.), § 4, eff. June 4, 1986.)