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Searching 2018 Special Session

The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 145 : SUPERVISION, REHABILITATION, AND LIQUIDATION OF INSURERS

Subchapter 003 : FORMAL PROCEEDINGS

(Cite as: 8 V.S.A. § 7055)
  • § 7055. Termination of rehabilitation

    (a) Whenever the Commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public, or would be futile, the Commissioner may petition the Superior Court of Washington County for an order of liquidation. A petition under this subsection shall have the same effect as a petition under section 7056 of this title. The Court shall permit the directors of the insurer to take such actions as are reasonably necessary to defend against the petition but may order payment from the estate of the insurer of costs and other expenses of defense only if the directors make a showing to the satisfaction of the Court that they incurred such expenses in good faith and with a reasonable belief that they would prevail.

    (b) The protection of the interests of insureds, claimants, and the public requires the timely performance of all insurance policy obligations. If the payment of policy obligations is suspended in substantial part for a period of six months at any time after the appointment of the rehabilitator and the rehabilitator has not filed an application for approval of a plan under subsection 7053(d) of this title, the rehabilitator shall petition the Court for an order of liquidation on grounds of insolvency.

    (c) The rehabilitator may at any time petition the Superior Court of Washington County for an order terminating rehabilitation of an insurer. The Court shall also permit the directors of the insurer to petition the Court for an order terminating rehabilitation of the insurer and may order payment from the estate of the insurer of such costs and other expenses of such petition only if the directors make a showing to the satisfaction of the Court that they incurred such expenses in good faith and with a reasonable belief that they would prevail. If the Court upon a petition or upon its own motion finds that rehabilitation has been accomplished and that grounds for rehabilitation under section 7051 of this title no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. (Added 1991, No. 45, § 2, eff. May 29, 1991.)