The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 145 : Supervision, Rehabilitation, and Liquidation of Insurers

Subchapter 001 : GENERAL PROVISIONS

• § 7033. Injunctions and orders

  (a) A receiver appointed in a proceeding under this chapter may at any time apply for, and any court of general jurisdiction may grant, restraining orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to prevent:

  (1) the transaction of further business;

  (2) the transfer of property;

  (3) interference with the receiver or with a proceeding under this chapter;

  (4) waste of the insurer’s assets;

  (5) dissipation and transfer of bank accounts;

  (6) the institution or further prosecution of any actions or proceedings;

  (7) the obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer, its assets or its policyholders;

  (8) the levying of execution against the insurer, its assets or its policyholders;

  (9) the making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;

  (10) the withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or

  (11) any other threatened or contemplated action that might lessen the value of the insurer’s assets or prejudice the rights of policyholders, creditors, or shareholders, or the administration of any proceeding under this chapter.

  (b) The receiver may apply to a court outside the State for the relief described in subsection (a) of this section.

  (c) Notwithstanding subsections (a) and (b) of this section, subsection 7054(a) of this title, or any other provision of this chapter to the contrary, no person, for more than 10 days, shall be restrained, stayed, enjoined, or prohibited from exercising or enforcing any right or cause of action under any pledge, security, credit, collateral, loan, advances, reimbursement, or guarantee agreement or arrangement, or any similar agreement, arrangement, or other credit enhancement to which a federal home loan bank is a party.

  (d) A federal home loan bank exercising its rights regarding collateral pledged by an insurer-member shall, within seven days after receiving a redemption request made by the insurer-member, repurchase any of the insurer-member’s outstanding capital stock in excess of the amount the insurer-member must hold as a minimum investment. The federal home loan bank shall repurchase the excess outstanding capital stock only to the extent that it determines in good faith that the repurchase is both of the following:

  (1) permissible under federal laws and regulations and the federal home loan bank’s capital plan; and

  (2) consistent with the capital stock practices currently applicable to the federal home loan bank’s entire membership.

  (e) Not later than 10 days after the date of appointment of a receiver in a proceeding under this chapter involving an insurer-member of a federal home loan bank, the federal home loan bank shall provide to the receiver a process and timeline for the following:

  (1) the release of any collateral held by the federal home loan bank that exceeds the amount that is required to support the secured obligations of the insurer-member and that is remaining after any repayment of loans, as determined under the applicable agreements between the federal home loan bank and the insurer-member;

  (2) the release of any collateral of the insurer-member remaining in the federal home loan bank’s possession following repayment in full of all outstanding secured obligations of the insurer-member;

  (3) the payment of fees owed by the insurer-member and the operation, maintenance, closure, or disposition of deposits and other accounts of the insurer-member, as mutually agreed upon by the receiver and the federal home loan bank; and

  (4) any redemption or repurchase of federal home loan bank stock or excess stock of any class that the insurer-member is required to own under agreements between the federal home loan bank and the insurer-member.

  (f) Upon the request of a receiver appointed in a proceeding under this chapter involving a federal home loan bank insurer-member, the federal home loan bank shall provide to the receiver any available options for the insurer-member to renew or restructure a loan. In determining which options are available, the federal home loan bank may consider market conditions, the terms of any loans outstanding to the insurer-member, the applicable policies of the federal home loan bank, and the federal laws and regulations applicable to federal home loan banks.

  (g) As used in this section, “federal home loan bank” means an institution chartered under the “Federal Home Loan Bank Act of 1932,” 12 U.S.C. 1421, et seq. and “insurer-member” means a member of the federal home loan bank in question that is an insurer. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2023, No. 32, § 10, eff. July 1, 2023.)