§ 7031. Definitions
As used in this chapter:
(1) “Ancillary state” means any state other than a domiciliary state.
(2) “Commissioner” means the Commissioner of Financial Regulation.
(3) “Creditor” is a person having any claim, whether matured or unmatured, liquidated
or unliquidated, secured or unsecured, absolute, fixed, or contingent.
(4) “Delinquency proceeding” means any proceeding instituted against an insurer for the
purpose of liquidating, rehabilitating, reorganizing, or conserving such insurer,
and any summary proceeding under sections 7041 and 7042 of this title. “Formal delinquency proceeding” means any liquidation or rehabilitation proceeding.
(5) “Department” means the Department of Financial Regulation.
(6) “Doing business,” as used in this chapter only, includes any of the following acts,
whether effected by mail or otherwise:
(A) the issuance or delivery of contracts of insurance to persons resident in this State;
(B) the solicitation of applications for contracts of insurance, or other negotiations
preliminary to the execution of contracts of insurance;
(C) the collection of premiums, membership fees, assessments or other consideration for
contracts of insurance;
(D) the transaction of matters subsequent to execution of contracts of insurance and arising
out of them; or
(E) operating under a license or certificate of authority, as an insurer, issued by the
Commissioner.
(7) “Domiciliary state” means the state in which an insurer is incorporated or organized
or, in the case of an alien insurer, its state of entry.
(8) “Fair consideration” is given for property or obligation:
(A) when in exchange for such property or obligation, as a fair equivalent therefore,
and in good faith, property is conveyed or services are rendered or an obligation
is incurred or an antecedent debt is satisfied; or
(B) when such property or obligation is received in good faith to secure a present advance
or antecedent debt in amount not disproportionately small as compared to the value
of the property or obligation obtained.
(9) “Foreign country” means any other jurisdiction not in any state.
(10) “General assets” mean all property, real, personal, or otherwise, not specifically
mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit
of specified persons or classes of persons. As to specifically encumbered property,
“general assets” include all such property or its proceeds in excess of the amount
necessary to discharge the sum or sums secured thereby. Assets held in trust and
on deposit for the security or benefit of all policyholders or all policyholders and
creditors, in more than a single state, shall be treated as general assets.
(11) “Guaranty association” means the Vermont Property and Casualty Insurance Guaranty
Association created in accordance with the provisions of chapter 101, subchapter 9
of this title, the Vermont Life and Health Insurance Guaranty Association created
in accordance with the provisions of chapter 112 of this title, and any other similar
entity now or hereafter created by the General Assembly of this State for the payment
of claims of insolvent insurers. “Foreign guaranty association” means any similar
entities now in existence in or hereafter created by the legislature of any other
state.
(12) “Insolvency” or “insolvent” means:
(A) for an insurer issuing only assessable insurance policies:
(i) the inability to pay any obligation within 30 days after it becomes payable; or
(ii) if an assessment be made within 30 days after such date, the inability to pay any
obligation 30 days following the date specified in the first assessment notice issued
after the date of loss.
(B) for any insurer, other than an insurer described in subdivision (A) of this subdivision
(12), that it is unable to pay its obligations when they are due, or when its assets
admitted pursuant to this title do not exceed its liabilities plus the greater of:
(i) any capital and surplus required by law for its organization; or
(ii) the total par or stated value of its authorized and issued capital stock.
(C) as used in this subdivision (12), “liabilities” includes reserves required by statute
or by general regulations of the Department or specific requirements imposed by the
Commissioner upon a subject company at the time of admission or subsequent to its
admission.
(13) “Insurer” means any person who has done, purports to do, is doing or is licensed to
do an insurance business, and is or has been subject to the authority of, or to liquidation,
rehabilitation, reorganization, supervision, or conservation by, any insurance commissioner.
As used in this chapter, insurer shall also include:
(A) all insurers who are doing, or have done, an insurance business in this State, and
against whom claims arising from that business may exist now or in the future;
(B) all insurers who purport to do an insurance business in this State;
(C) all insurers who have insureds resident in this State;
(D) all other persons organized or in the process of organizing with the intent to do
an insurance business in this State;
(E) all nonprofit hospital and medical service plans, subject to the provisions of chapters
123 and 125 of this title;
(F) all fraternal benefit societies subject to the provisions of chapter 121 of this title;
(G) all title insurance companies;
(H) all captive insurance companies, risk retention groups, and other similar entities
regulated pursuant to this title;
(I) all mutual workers’ compensation insurance associations subject to the provisions
of chapter 117 of this title;
(J) all health maintenance organizations and other prepaid health care delivery plans
regulated pursuant to this title;
(K) municipal pools, continuing care retirement communities, and other specialty insurers
subject to regulation by the Department; and
(L) all mutual insurance holding companies and stock insurance holding companies of a
reorganized stock insurance company as provided in chapter 101, subchapter 3A of this
title.
(14) “Preferred claim” means any claim with respect to which the terms of this chapter
accord priority of payment from the general assets of the insurer.
(15) “Receiver” means receiver, liquidator, rehabilitator, or conservator as the context
requires.
(16) “Reciprocal state” means any state other than this State in which in substance and
effect subsection 7057(a) and sections 7093, 7094, and 7096 through 7098 of this title are in force, and in which provisions are in force requiring that the commissioner
or equivalent official be the receiver of a delinquent insurer, and in which some
provision exists for the avoidance of fraudulent conveyances and preferential transfers.
(17) “Secured claim” means any claim secured by mortgage, trust, deed, pledge, deposit
as security, escrow, or otherwise, but not including special deposit claims or claims
against general assets. The term also includes claims that have become liens upon
specific assets by reason of judicial process.
(18) “Special deposit claim” means any claim secured by a deposit made pursuant to statute
for the security or benefit of a limited class or classes of persons, but not including
any claim secured by general assets.
(19) “State” means any state, district, or territory of the United States and the Panama
Canal Zone.
(20) “Transfer” shall include the sale and every other and different mode, direct or indirect,
of disposing of or of parting with property or with an interest therein, or with the
possession thereof or of fixing a lien upon property or upon an interest therein,
absolutely or conditionally, voluntarily, by or without judicial proceedings. The
retention of a security title to property delivered to a debtor shall be deemed a
transfer suffered by the debtor. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 1995, No. 180 (Adj. Sess.), § 38; 1999, No. 86 (Adj. Sess.), § 9, eff. April 27, 2000; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2021, No. 105 (Adj. Sess.), § 250, eff. July 1, 2022.)