Examination and Reports

V.S.A. tit. 8, ch. 101, subch. 7

in effect

8 V.S.A. § 3552 Fees assessed by the National Association of Insurance Commissioners

3552. Fees assessed by the National Association of Insurance Commissioners A company domiciled in this State and licensed by the Commissioner of Financial Regulation under this title, including captive insurance companies and risk retention groups licensed under chapter 141 of this title shall not be required to pay any fee, assessment, or charge of any kind to the National Association of Insurance Commissioners, including annual statement filing fees, securities valuation fees, and any other such fees, assessments, and charges determined by the Commissioner to be necessary for such companies to do business, unless such fees, assessments, or charges have been established and authorized in rules adopted by the Commissioner. Added 1995, No. 83 (Adj. Sess.), § 3; amended 1995, No. 180 (Adj. Sess.), § 38(a); 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.

8 V.S.A. §§ 3553-3560 [Reserved for future use.]

8 V.S.A. § 3561 Annual and quarterly statements

3561. Annual and quarterly statements (a) Each domestic, foreign, and alien insurance company doing business in this State shall, on or before March 1 of each year, file a copy of its annual statement convention blank, along with any additional filings as prescribed by the Commissioner for the preceding year. The statement shall be prepared in accordance with the NAIC’s Instructions Handbook and Accounting Practices and Procedures Manual, shall include the signed jurat page verified by oath or affirmation of two of its executive officers and the actuarial certification, and shall be in such general form and context, as approved by, and shall contain any other information required by, the NAIC with any useful or necessary modifications or adaptations thereof required or approved or accepted by the Commissioner for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the Commissioner. The statement of an alien insurer shall relate only to the insurer’s transactions and affairs in the United States unless the Commissioner requires otherwise. A foreign or alien company, upon withdrawing from the State of Vermont shall pay to the Commissioner $25.00 for the filing of its final financial statement. (b) Each year, in a form and manner prescribed by the Commissioner, each domestic, foreign, and alien insurer doing business in this State shall file with the NAIC a copy of the quarterly statements exhibiting its condition and affairs for the period beginning on January 1 of the current calendar year through and including the last day of the quarter for which the report is being made. The first quarterly statement shall be filed on or before May 15. The second quarterly statement shall be filed on or before August 15. The third quarterly statement shall be filed on or before November 15. If any of the dates specified in this subsection falls on a day other than a business day, then the quarterly statement is due on or before the first business day preceding such date. The information filed with the NAIC shall include a jurat page. A copy of any amendments and addenda to the quarterly statement filings subsequently filed with the Department shall also be filed with the NAIC. (c) A foreign insurer domiciled in a state that has a law substantially similar to subsection (a) of this section shall be deemed in compliance with this section. (d)(1) At the direction of the Commissioner, each domestic, foreign, and alien insurance company doing business in this State shall annually submit to the Commissioner, in a manner and on forms approved by the Commissioner, a statement of its market conduct performance for the purpose of permitting the participation of this State in the Market Conduct Annual Statement program of the NAIC. The statement shall be prepared in accordance with the Market Conduct Annual Statement instructions published by the NAIC, with any useful or necessary modifications or adaptations thereof required or approved or accepted by the Commissioner for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the Commissioner. (2) Subject to section 22 of this title, all market conduct annual statements and other information filed pursuant to subdivision (1) of this subsection, all records, and other information of investigations conducted by the Department under this title, whether such statements, records, or information are in the possession of another regulatory or law enforcement agency, the NAIC, or any person, shall be confidential and privileged, shall not be made public, shall not be subject to subpoena, and shall not be subject to discovery or introduction into evidence in any private civil action. (e) The Commissioner shall adopt by rule the Medical Professional Liability Closed Claim Reporting Model Law of the NAIC, as may be amended, or in the Commissioner’s discretion a substantially similar rule. Subject to section 22 of this title, information that identifies, directly or indirectly, the closed claims of a health care facility or a health care provider shall be confidential and privileged, shall not be made public, shall not be subject to subpoena, and shall not be subject to discovery or introduction into evidence in any private civil action. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 9, § 1); amended 1991, No. 101, § 5; 1991, No. 249 (Adj. Sess.), § 1; 2009, No. 42, § 6; 2025, No. 142 (Adj. Sess.), § 45, eff. July 1, 2026.

8 V.S.A. § 3562 Time reports due

3562. Time reports due Reports of all insurance companies shall be made annually, on or before March 1 for the year ending December 31, or within any extension of time not to exceed 30 days that the Commissioner for good cause may have granted. Whenever the Commissioner deems it necessary, the Commissioner may demand an additional statement of the affairs of any company transacting business in this State. 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 9, § 2); amended 1981, No. 15, § 2; 2001, No. 71, § 6, eff. June 16, 2001.

8 V.S.A. § 3563 Examination of companies; fees

3563. Examination of companies; fees The Commissioner shall thoroughly inspect and examine the affairs of each domestic insurer to ascertain its financial condition, its ability to fulfill its obligations, and whether it has complied with the provisions of law. Such an inspection and examination shall be conducted personally or by a competent person appointed by the Commissioner at least every three years and whenever determined to be prudent by the Commissioner. The Commissioner may enlarge the aforesaid three-year period to five years, provided the insurer is subject to a comprehensive annual audit during such period of a scope satisfactory to the Commissioner by independent auditors approved by the Commissioner. The examination shall include a review of the financial analysis performed by the Commissioner and shall be conducted in accordance with statutory accounting principles pursuant to guidelines, principles, manuals, instructions, and other procedures promulgated by the National Association of Insurance Commissioners, together with any useful or necessary modifications or adaptations thereof required or approved by the Commissioner. The expenses of the examinations shall be paid to the State by the company or companies examined and the Commissioner of Finance and Management shall issue his or her warrants for the proper charges incurred in all examinations. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 9, § 3); amended 1971, No. 170 (Adj. Sess.), § 1, eff. April 27, 1982; 1983, No. 195 (Adj. Sess.), § 5(b); 1991, No. 101, § 6; 2003, No. 105 (Adj. Sess.), § 5; 2013, No. 29, § 22, eff. May 13, 2013.

8 V.S.A. § 3564 Examination of foreign insurers; expenses

3564. Examination of foreign insurers; expenses (a) At least once every three years and when the Commissioner determines it to be prudent for the protection of policyholders in this State, he or she shall, in like manner, visit and examine or cause to be visited and examined by some competent person whom the Commissioner may appoint for that purpose, any foreign or alien insurer applying for admission or already admitted to do business in this State. The Commissioner may enlarge the aforesaid three-year period to five years. The examination of an alien insurer shall be limited to its insurance transactions and affairs in the United States unless otherwise required by the Commissioner. The examination shall be conducted in accordance with statutory accounting principles pursuant to guidelines, principles, manuals, instructions, and other procedures promulgated by the National Association of Insurance Commissioners, together with any useful or necessary modifications or adaptations thereof required or approved by the Commissioner. Such insurer shall pay the proper charges incurred in such examination, including the expenses of the Commissioner and the expenses and compensation of his or her assistants employed therein. Such examination shall include a computation of the reinsurance reserve. (b) In lieu of an examination under this section of any foreign or alien insurer licensed in this State, the Commissioner may accept an examination report on the company as prepared by the insurance department for the company’s state of domicile or port-of-entry state. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 9, § 4); amended 1991, No. 101, § 7; 1991, No. 249 (Adj. Sess.), § 2; 1993, No. 12, § 2, eff. April 26, 1993; 1995, No. 83 (Adj. Sess.), § 5; 2003, No. 105 (Adj. Sess.), § 6.

8 V.S.A. § 3565 Examination of officers and books

3565. Examination of officers and books (a) The Commissioner, inspecting an insurance company, may require its officers, or any agent thereof, to exhibit books kept by them relating to their business and may examine under oath such agents and officers and other persons as he or she thinks proper, in relation to the business transactions and conditions of the company. (b) Every company or person from whom information is sought, its officers, directors, and agents must provide to the examiners appointed by the Commissioner, timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business, and affairs of the company being examined. The officers, directors, employees, and agents of the company or person shall cooperate in the examination. Added 1967, No. 344 (Adj. Sess.), § 1, (ch. 1, subch. 9, § 5); amended 1991, No. 249 (Adj. Sess.), § 3.

8 V.S.A. § 3566 Penalty for refusal

3566. Penalty for refusal The Commissioner may suspend, revoke, or nonrenew the license of any company if the company, by its officers, directors, employees, or agents, refuses to submit to examination or to comply with any reasonable written request of the examiners. Any such proceedings for suspension, revocation, or nonrenewal of any license or authority before the Commissioner shall be conducted in accordance with 3 V.S.A. chapter 25. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 9, § 6); amended 1991, No. 249 (Adj. Sess.), § 4.

8 V.S.A. § 3567 Liquor liability insurance records

3567. Liquor liability insurance records (a) All insurers licensed to sell insurance, including nonadmitted insurers with whom certain types of insurance may be placed as permitted by chapter 138 of this title, shall submit the following liquor liability insurance statistics to the Commissioner of Financial Regulation who shall collect and maintain records on the following: (1) the number of policies written, premiums written, and premiums earned for liquor liability insurance; (2) the number of claims paid and dollar amount of claims paid; and (3) the number of claims incurred and dollar amount of claims incurred. (b) The Commissioner of Financial Regulation shall make available to the General Assembly the information collected and maintained under this section. The Commissioner shall report to the General Assembly the number of companies writing liquor liability insurance. (c) If an insurer cannot determine the amount of premiums written or premiums earned because the liquor liability coverage is part of a policy or policies providing other liability coverage, reasonable methods of estimation may be used as approved by the Commissioner of Financial Regulation. (d) “Liquor liability insurance” means that type of liability insurance that covers the selling or serving of alcoholic beverages for a consideration and includes policies that provide other liability coverage in addition to liquor liability insurance. Added 1987, No. 103, § 5; amended 1989, No. 155 (Adj. Sess.), § 1; 1989, No. 225 (Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a).

8 V.S.A. § 3568 Preservation of records

3568. Preservation of records (a) Every domestic and foreign insurer shall preserve their business records in accordance with the rules adopted under this section. (b) The Commissioner may by rule require insurers to preserve any records relating to the business of insurance as are necessary for efficient and effective insurance regulation. (c) If a record is disposed of in accordance with rules adopted by the commissioner, an insurer shall be under no duty to produce the record in any administrative or judicial proceeding. (d) The rules adopted by the Commissioner may designate methods of reproduction of records into electronic, microfilm or microfiche form, or other process. Any such reproduction shall have the same force and effect as the original and may be admitted in evidence as the original itself. Added 1989, No. 155 (Adj. Sess.), § 2.

8 V.S.A. § 3569 National Association of Insurance Commissioners filing requirements

3569. National Association of Insurance Commissioners filing requirements (a) Each domestic, foreign, and alien insurer who is authorized to transact insurance in this State shall annually on or before March 1 of each year, or within any extension of time not to exceed 30 days that the Commissioner, for good cause may have granted, file with the National Association of Insurance Commissioners a copy of its annual statement convention blank as prescribed and adopted by the National Association of Insurance Commissioners, along with such additional filings as prescribed by the Commissioner for the preceding year. The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the Commissioner and shall include the signed jurat page and the actuarial certification. Any amendments and addendums to the annual statement filing subsequently filed with the Commissioner shall also be filed with the National Association of Insurance Commissioners. The Commissioner in his or her sole discretion may waive one or more of the requirements established by this subsection. (b) Foreign insurers that are domiciled in a state that has a law substantially similar to subsection (a) of this section shall be deemed in compliance with this section. Added 1991, No. 101, § 8; amended 2013, No. 29, § 23.

8 V.S.A. § 3570 Immunity

3570. Immunity In the absence of actual malice, members of the National Association of Insurance Commissioners, their duly authorized committees, subcommittees, and task forces, their delegates, National Association of Insurance Commissioners’ employees, and all others charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the Commissioner under the authority of this act and shall not be subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required hereunder. The immunity conferred by this section shall not apply if the Commissioner, in his or her sole discretion, determines that the National Association of Insurance Commissioners has substantially failed to comply with the provisions of section 3551 of this title, or has imposed fees, assessments, or charges in excess of those provided in section 3552 of this title. Added 1991, No. 101, § 9; amended 1995, No. 83 (Adj. Sess.), § 6.

8 V.S.A. § 3571 Confidentiality

3571. Confidentiality All financial analysis ratios and examination synopses concerning insurance companies that are submitted to the Department by the National Association of Insurance Commissioners’ Insurance Regulatory Information System are confidential and may not be disclosed by the Department. Added 1991, No. 101, § 10.

8 V.S.A. § 3572 Revocation of certificate of authority

3572. Revocation of certificate of authority The Commissioner may suspend, revoke, or refuse to renew the certificate of authority of any insurer failing to file its annual statement when due or within any extension of time that the Commissioner, for good cause, may have granted. Added 1991, No. 101, § 11.

8 V.S.A. § 3573 Conduct of examinations

3573. Conduct of examinations (a) Upon determining that an examination should be conducted, the Commissioner or the Commissioner’s designee shall issue an examination order appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting a financial or a market conduct examination, the examiner shall observe those guidelines and procedures set forth in the Examiners’ Handbook adopted by the National Association of Insurance Commissioners as amended from time to time. The Commissioner may also use such other guidelines or procedures as the Commissioner may deem necessary or appropriate under the circumstances. (b) When making an examination under this section, the Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists, the cost of which shall be borne by the company that is the subject of the examination. (c) The Commissioner is authorized to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this State. (d) Findings of fact made pursuant to any examination shall be prima facie evidence in any legal or regulatory action. (e) The Commissioner is authorized to use and make public any final or preliminary examination report, any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action. Added 1991, No. 249 (Adj. Sess.), § 5; amended 1999, No. 38, § 1, eff. May 20, 1999.

8 V.S.A. § 3574 Examination reports

3574. Examination reports (a) General description. All examination reports shall be comprised of only facts appearing upon the books, records, or other documents of the company, its agents or other persons examined, or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs, and such conclusions and recommendations as the examiners find reasonably warranted from the facts. (b) Filing of examination report. No later than 60 days following completion of the examination, the examiner in charge shall file with the Department a written report of examination under oath. Upon receipt of the report, the Department shall transmit the report to the company examined, together with a notice that shall afford the company examined a reasonable opportunity of not more than 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report. (c) Adoption of report on examination. Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the Commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner’s work papers and shall order the report adopted together with any modifications and amendments that he or she deems appropriate. If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the Commissioner, the Commissioner may order the company to take any action the Commissioner considers necessary and appropriate to cure such violation. The company may file an administrative appeal within 30 days of the Commissioner’s order. Such appeal shall be heard in accordance with 3 V.S.A. chapter 25. (d) Publication and use. (1) The Commissioner may hold the contents of the examination report confidential for 15 days following the issuance of the Commissioner’s order under subsection (c) of this section. (2) The Commissioner may disclose the content of an examination report, preliminary examination report or results, or any related matter, to the insurance department of any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, as long as such agency or office receiving the report or related matters agrees in writing to hold it in a manner consistent with this section. (3) The Commissioner may refuse to disclose any information or records that would indicate or show the existence or content of any investigation or activity of a criminal justice agency. (4) All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the Commissioner or any other person in the course of an examination made under this section are confidential and are not subject to subpoena and may not be made public by the Commissioner or any other person, except to the extent provided in this subsection and subsection 3573(e) of this title. The Commissioner may grant access to such information to the National Association of Insurance Commissioners. Such parties must agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this section, unless the prior written consent of the company to which it pertains has been obtained. Added 1991, No. 249 (Adj. Sess.), § 6.

8 V.S.A. § 3575 Conflict of interest

3575. Conflict of interest (a) No examiner may be appointed by the Commissioner if such examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this subchapter. This section shall not be construed to disqualify an examiner who is: (1) a policyholder or claimant under an insurance policy; (2) a grantor of a mortgage or similar instrument on the examiner’s residence to a regulated entity if done under customary terms and in the ordinary course of business; (3) an investment owner in shares of regulated diversified investment companies; or (4) a settlor or beneficiary of a “blind trust” into which any otherwise impermissible holdings have been placed. (b) Notwithstanding the requirements of this section, the Commissioner may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions, even though said persons may from time to time be similarly employed or retained by persons subject to examination under this subchapter. Added 1991, No. 249 (Adj. Sess.), § 7.

8 V.S.A. § 3576 Immunity from liability

3576. Immunity from liability (a) No insurer nor any of its officers, employees, or agents shall have a cause of action against an authorized representative of the Commissioner or an examiner appointed by the Commissioner as a result of any statements made or work performed in good faith while carrying out the provisions of this subchapter. (b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Commissioner or the Commissioner’s authorized representative or examiner pursuant to an examination made under this section, if such act of communication or delivery was performed in good faith. (c) This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection (a) or (b) of this section. (d) A person identified in subsection (a) or (b) of this section shall be entitled to an award of attorney’s fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities in carrying out the provisions of this subchapter and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is “substantially justified” if it had a reasonable basis in law or fact at the time that it was initiated. Added 1991, No. 249 (Adj. Sess.), § 8.

8 V.S.A. § 3577 Requirements for actuarial opinions

3577. Requirements for actuarial opinions (a) Each licensed insurance company shall include on or attached to its annual statement submitted under section 3561 of this title a statement of a qualified actuary, entitled “statement of actuarial opinion,” setting forth an opinion on life and health policy and claim reserves and an opinion on property and casualty loss and loss adjustment expenses reserves. (b) The “statement of actuarial opinion” shall be treated as a public document and shall conform to the Standards of Practice promulgated by the Actuarial Standards Board of the American Academy of Actuaries, the standards of the Casualty Actuarial Society, and such additional standards as the Commissioner may establish by rule. The Commissioner by rule shall establish minimum standards applicable to the valuation of health disability, sickness, and accident plans. (c) Opinions required by this section shall apply to all business in force, and shall be stated in form and in substance acceptable to the Commissioner as prescribed by rule. (1) In the case of property and casualty insurance companies domiciled in this State, every company that is required to submit a statement of actuarial opinion shall annually submit an actuarial opinion summary, written by the company’s appointed actuary. This actuarial opinion summary shall be filed in accordance with the appropriate Property and Casualty Annual Statement Instructions of the National Association of Insurance Commissioners (NAIC) and shall be considered as a document supporting the actuarial opinion required in subsection (a) of this section. A property and casualty insurance company licensed but not domiciled in this State shall provide the actuarial opinion summary upon request. (2) In the case of property and casualty insurance companies, an actuarial report and underlying work papers, as required by the appropriate Property and Casualty Annual Statement Instructions of the NAIC, shall be prepared to support each actuarial opinion. If the property and casualty insurance company fails to provide a supporting actuarial report or work papers at the request of the Commissioner or if the Commissioner determines that the supporting actuarial report or work papers provided by the insurance company is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting actuarial report or work papers. (3) In the case of property and casualty insurance companies, the appointed actuary shall not be liable for damages to any person other than the insurance company and the Commissioner for any act, error, omission, decision, or conduct with respect to the actuary’s opinion, except in cases of fraud or willful misconduct on the part of the appointed actuary. (d) In the case of life insurance companies doing business in this State, the opinion shall state whether the reserves and related actuarial items held in support of the policies and contracts specified by the Commissioner by rule are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, comply with applicable laws of this State, and comply with such further standards as the Commissioner may establish by rule. (e) Every life insurance company shall annually include in the opinion required by this section an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the Commissioner by rule, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company’s obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts. (f) In the case of an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this State. (g) The Commissioner may provide by rule for a transition period for establishing any higher reserves that the qualified actuary may deem necessary in order to render the opinion required by this section. (h) In the case of life and health insurance companies, “qualified actuary” is an individual who: (1) is a member of good standing of the American Academy of Actuaries; (2) is qualified to sign statements of actuarial opinion for life and health insurance company annual statements in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements; and (3) is familiar with the valuation requirements applicable to life and health insurance companies. (i) In the case of property and casualty insurance companies, “qualified actuary” is an individual who: (1) is a member of good standing of the Casualty Actuarial Society; (2) is qualified to sign statements of actuarial opinion for property and casualty insurance company annual statements in accordance with the Casualty Actuarial Society qualification standards for actuaries signing such statements; and (3) is familiar with the valuation requirements applicable to property and casualty insurance companies. (j) The Commissioner, after notice and administrative hearing, may disqualify an actuary who has: (1) violated any provision of, or any obligation imposed by, the insurance law or other law in the course of his or her dealings as a qualified actuary; or (2) been found guilty of fraudulent or dishonest practices; or (3) demonstrated his or her incompetency, lack of cooperation, or unethical behavior to act as a qualified actuary; or (4) submitted to the Commissioner during the past five years an actuarial opinion or memorandum that the Commissioner rejected because it did not meet the provisions of this section or the standards set by the Actuarial Standards Board or the Casualty Actuarial Society; or (5) resigned or been removed as an actuary within the past five years as a result of acts or omissions indicated in any adverse report on examination or as a result of failure to adhere to generally acceptable actuarial standards; or (6) has failed to notify the Commissioner of any action taken by any commissioner of any other state similar to that under this subsection. (k) Upon written application of any insurer, the Commissioner may, in his or her discretion, grant an exemption from compliance with this section if the Commissioner finds, upon review of the application, that compliance with this rule would constitute a financial or organizational hardship upon the insurer. An exemption may be granted at any time and from time to time for a specified period or periods. (l) Actuarial reports, actuarial opinion summaries, work papers, and any other documents, information, or materials provided to the Department in connection with the actuarial report, work papers, or actuarial opinion summary shall be confidential by law and privileged, shall not be subject to inspection and copying under 1 V.S.A. § 316, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private litigation. (1) This subsection shall not be construed to limit the Commissioner’s authority to release documents to the Actuarial Board for Counseling and Discipline, provided the material is required for the purpose of professional disciplinary proceedings and further provided that procedures satisfactory to the Commissioner are established for preserving the confidentiality of the documents, nor shall this subsection be construed to limit the Commissioner’s authority to use the documents, materials, or other information in furtherance of any regulatory or legal action brought as part of the Commissioner’s official duties. (2) Neither the Commissioner nor any person who receives documents, materials, or other information while acting under the authority of the Commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information under this subsection. (3) In order to assist in the performance of the Commissioner’s duties, the Commissioner may: (A) Share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (d) of this section, with other state, federal, and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information and has the legal authority to maintain confidentiality. (B) Receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information. (4) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of the disclosure to the Commissioner under this section or as a result of sharing as authorized by subdivision (3) of this subsection. Added 1991, No. 249 (Adj. Sess.), § 9; amended 2009, No. 137 (Adj. Sess.), § 4a.

8 V.S.A. § 3578a Annual financial reporting

3578a. Annual financial reporting The Commissioner shall adopt by rule the Annual Financial Reporting Model Regulation of the National Association of Insurance Commissioners, as may be amended from time to time, or in the Commissioner’s discretion a regulation substantially similar thereto. Added 2009, No. 42, § 7; amended 2013, No. 29, § 25, eff. May 13, 2013.

8 V.S.A. § 3579 Qualified accountants

3579. Qualified accountants (a) A certified public accountant retained to perform audits of an insurer pursuant to the annual financial reporting rule adopted by the Commissioner under section 3578a of this title: (1) shall be a member in good standing of the American Institute of Certified Public Accountants and in all states in which the accountant is licensed, or, for a Canadian or British company, be a chartered accountant; (2) shall be independent with respect to the insurer; (3) shall conform to the standards of the profession as contained in the code of professional ethics of the American Institute of Certified Public Accountants and of the Vermont Board of Public Accountancy or similar codes governing such accountant’s professional conduct or ethics; (4) shall not directly or indirectly enter into an agreement of indemnification or release from liability with respect to the insurer being audited where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing or other misrepresentations made by the insurer or its representatives; and (5) may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration; provided, however, in the event of a delinquency proceeding commenced against the insurer under chapter 145 of this title, the mediation or arbitration provisions shall operate at the option of the statutory successor. (b) A domestic insurer required to be audited pursuant to the annual financial reporting rule adopted by the Commissioner under section 3578a of this title shall register with the Commissioner the name and address of the certified public accountant retained in compliance with this section and pay a registration fee of $100.00. If the Commissioner determines that a report filed by a foreign or alien insurer under subsection 3578(f) of this title is not substantially similar to the requirements imposed by the annual financial reporting rule adopted by the Commissioner under section 3578a of this title, the foreign or alien insurer shall, within 30 days of such determination, register the name and address of the certified public accountant retained in compliance with this section and pay a registration fee of $100.00. The notice of registration shall include the accountant’s statement that the accountant: (1) meets the requirements of this section; (2) is familiar with the insurance laws of the insurer’s state of domicile that relate to accounting and financial matters; (3) will express his or her opinion on whether the financial statements conform to the statutory accounting practices prescribed or permitted by the Department, and specify any exceptions; (4) understands that the Commissioner will be relying on the accountant’s report to monitor the financial position of the insurer; (5) agrees to make available to the Commissioner for inspection or copying any and all work papers generated in the audit, including procedures followed, tests performed, information obtained, conclusions, planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of documents, schedules, or commentaries prepared or obtained by the independent certified public accountant in the course of examination; and (6) agrees to retain the audit work papers until the Department has filed a report of examination on the period of the audit, but no longer than seven years from the date of the audit report. (c) An insurer shall notify the Commissioner in writing within five business days of the dismissal or resignation of the accountant who prepared the insurer’s immediately preceding filed audited financial report. The insurer shall notify the Commissioner in writing, within 10 business days of the notice of dismissal or resignation, whether in the 24 months preceding such dismissal or resignation there were any substantial, material disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, including disagreements resolved to the former accountant’s satisfaction and disagreements not resolved to the former accountant’s satisfaction. Substantial disagreements include those that occur between the former accountant and personnel of the insurer responsible for the insurer’s audited financial report. Material disagreements include those that, if not resolved to the satisfaction of the former accountant, would have caused him or her to make reference to the subject matter of the disagreement in connection with his or her opinion. (d)(1) The Commissioner shall disqualify any certified public accountant who: (A) has engaged in unprofessional conduct as defined by 26 V.S.A. § 76; (B) has been found to have violated the insurance laws of any state with respect to prior audit reports; or (C) has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under this section. (2) After notice and hearing, the Commissioner may find that a certified public accountant is not qualified to express his or her opinion in the report required by this section and may require the insurer to replace the accountant with an accountant qualified under this section. Any hearing held under this subsection shall be governed by 3 V.S.A. chapter 25. (e) No partner or other person rendering the report required by the annual financial reporting rule adopted by the Commissioner under section 3578a of this title may act in that capacity for more than five consecutive years. Upon application by the insurer, the Commissioner may find that the rotation requirement of this subsection would pose an unreasonable hardship on the insurer and may extend the accountant’s period of qualification for an additional term. In making such determinations, the Commissioner may consider the experience of the retained accountant and the size of his or her business, the premium volume of the insurer, and the number of jurisdictions in which the insurer transacts business, as provided by the annual financial reporting rule adopted by the Commissioner under section 3578 of this title. (f) In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by such companies with their domiciliary supervision authority duly audited by an independent chartered accountant. Added 1991, No. 249 (Adj. Sess.), § 11; amended 1993, No. 12, § 5, eff. April 26, 1993; 2007, No. 49, § 4; 2013, No. 29, § 26.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/101Fetched: 10/21/2026