Vt. Stat. tit. 8 § 7031

Current through L. 2024, c. 185.

Section 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.

8 V.S.A. § 7031

Amended by 2022 , No. 105, § 250, eff. 7/1/2022.

Added 1991, No. 45, § 2, eff. 5/29/1991; amended 1995, No. 180 (Adj. Sess.), § 38; 1999, No. 86 (Adj. Sess.), § 9, eff. 4/27/2000; 2011, No. 78 (Adj. Sess.), § 2, eff. 4/2/2012.