Formation

V.S.A. tit. 8, ch. 101, subch. 1

in effect

8 V.S.A. § 3301 Purposes

3301. Purposes (a) Subject to the additional or varied requirements stated in this subchapter, a corporation may be formed pursuant to the general corporation law to do any and all insurance and reinsurance comprised in any one of the following numbered subdivisions: (1) “Life insurance,” which is insurance on human lives. The business of life insurance includes also the granting of endowment benefits, additional benefits in event of death or dismemberment by accident or accidental means, additional benefits in event of the insured’s disability, and optional modes of settlement of proceeds of life insurance. Life insurance does not include workers’ compensation coverages. (2) “Health insurance,” which is insurance of human beings against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, and every insurance appertaining thereto. Health insurance does not include workers’ compensation coverages. (3) “Casualty insurance,” which includes: (A) “Vehicle insurance.” Insurance against loss of or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom, from any hazard or cause, and against any loss, liability, or expense resulting from or incidental to ownership, maintenance, or use of any such vehicle, aircraft, or animal; and provision of medical, hospital, surgical, disability benefits to injured persons, and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to insurance on the vehicle, aircraft, or animal. (B) “Automobile guaranty.” Insurance of the mechanical condition or freedom from defective or worn parts or equipment, of motor vehicles. (C) “Liability insurance.” Insurance against legal liability for the death, injury, or disability of any human being, or for damage to property; and provision of medical, hospital, surgical, disability benefits to injured persons, and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance. (D) “Workers’ compensation.” Insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees. (E) “Burglary and theft.” Insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, or wrongful conversion, disposal or concealment, or from any attempt at any of the foregoing, including supplemental coverage for medical, hospital, surgical, and funeral expense incurred by the named insured or any other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; also insurance against loss of or damage to monies, coins, bullion, securities, notes, drafts, acceptances, or any other valuable papers and documents, resulting from any cause. (F) “Personal property floater.” Insurance upon personal effects against loss or damage from any cause, under a personal property floater. (G) “Glass.” Insurance against loss or damage to glass, including its lettering, ornamentation, and fittings. (H) “Boiler and machinery.” Insurance against any liability and loss or damage to property or interest resulting from accidents to or explosions of boilers, pipes, pressure containers, machinery, or apparatus, and to make inspection of and issue certificates of inspection upon boilers, machinery, and apparatus of any kind, whether or not insured. (I) “Leakage and fire extinguishing equipment.” Insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus, water pipes or containers, or by water entering through leaks or openings in buildings, and insurance against loss or damage to such sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus. (J) “Credit.” Insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured. (K) “Malpractice.” Insurance against legal liability of the insured, and against loss, damage, or expense incidental to a claim of such liability, and including medical, hospital, surgical, and funeral benefits to injured persons, irrespective of legal liability of the insured, arising out of the death, injury, or disablement of any person or arising out of damage to the economic interest of any person, as the result of negligence in rendering expert, fiduciary, or professional service. (L) “Congenital defects.” Insurance against congenital defects in human beings. (M) “Livestock insurance.” Insurance against loss or damage to livestock and services of a veterinary for such animals. (N) “Elevator.” Insurance against loss of or damage to any property of the insured, resulting from the ownership, maintenance, or use of elevators, except loss or damage by fire, and to make inspections of and issue certificates of inspection upon elevators. (O) “Entertainments.” Insurance indemnifying the producer of any motion picture, television, radio, theatrical, sport, spectacle, entertainment, or similar production, event, or exhibition against loss from interruption, postponement, or cancellation thereof due to death, accidental injury, or sickness of performers, participants, directors, or other principals. (P) “Failure to file certain instruments.” Insurance against loss resulting from failure to file or record written instruments affecting the title of or creating a lien upon personal property. (Q) “Miscellaneous.” Insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within any other kind of insurance as defined in this chapter, if such insurance is not disapproved by the commissioner as being contrary to law or public policy; provision of medical, hospital, surgical, and funeral benefits, and of coverage against accidental death or injury, as incidental to and part of other insurance as stated under subdivisions (3)(A), (C), (E), (H), (K), and (N) of this subsection shall for all purposes be deemed to be the same kind of insurance to which it is so incidental, and shall not be subject to provisions of this code applicable to life or health insurances. (4) “Marine and transportation insurance,” which includes insurance against any and all kinds of loss or damage to: (A) Vessels, craft, aircraft, cars, automobiles, and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests, and all other kinds of property and interests therein, in respect to, appertaining to, or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed, or similarly prepared for shipment or while awaiting shipment or during delays, storage, transshipment, or reshipment incident thereto, including marine builder’s risks and all personal property floater risks. (B) A person or to property in connection with or appertaining to a marine, inland marine, transit, or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance, or use of the subject matter of the insurance (but not including life insurance or surety bonds or insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance, or use of automobiles). (C) Precious stones, jewels, jewelry, gold, silver, and other precious metals, whether used in business or trade or otherwise and whether in the course of transportation or otherwise. (D) Bridges, tunnels, and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents, and supplies held in storage) unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot or civil commotion, or both, are the only hazards to be covered; piers, wharves, docks, and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot or civil commotion, or both, other aids to navigation and transportation, including dry docks and marine railways. (5) “Marine protection and indemnity insurance,” which is insurance against, or against legal liability of the insured for, loss, damage, or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair, or construction of a vessel, craft, or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness, or death or for loss of or damage to the property of another person. (6) “Wet marine and transportation insurance,” which is that part of marine and transportation insurance that includes only: (A) Insurance upon vessels, crafts, hulls, and of interests therein or with relation thereto. (B) Insurance of marine builder’s risks, marine war risks and contracts or marine protection and indemnity insurance. (C) Insurance of freights and disbursements pertaining to a subject of insurance coming within this section. (D) Insurance of personal property and interests therein, in the course of exportation from or importation into any country, and in the course of transportation coastwise or on inland waters, including transportation by land, water, or air from point of origin to final destination, in respect to, appertaining to, or in connection with any and all risks or perils of navigation, transit, or transportation, and while being prepared for and while awaiting shipment, and during delays, storage, transshipment, or reshipment incident thereto. (7) “Property insurance,” which is insurance on real or personal property of every kind and of every interest therein, whether on land, water, or in the air, against loss or damage from any and all hazard or cause, and against loss consequential upon such loss or damage, other than noncontractual legal liability for such loss or damage. Property insurance does not include title insurance, as defined in subdivision (9) of this subsection. (8) “Surety insurance,” which includes: (A) “Fidelity insurance,” which is insurance guaranteeing the fidelity of persons holding positions of public or private trust. (B) Insurance or guaranty of the obligations of employers under workers’ compensation laws. (C) Insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship. (D) Insurance indemnifying banks, bankers, brokers, financial or monied corporations or associations against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts, or other valuable papers, documents, money, precious metals and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including any loss while the same are being transported in armored motor vehicles, or by messenger, but not including any other risks of transportation or navigation; also insurance against loss or damage to such an insured’s premises or to his or her furniture, furnishings, fixtures, equipment, safes, and vaults therein, caused by burglary, robbery, theft, vandalism, or malicious mischief, or any attempt thereat. (9) “Title insurance,” which is the certification or guarantee of title or ownership, or insurance of owners of property or others having an interest therein or liens or encumbrances thereon, against loss by encumbrance, or defective titles, or invalidity, or adverse claim to title. A title insurer may also insure the identity, due execution, and validity of any note or bond secured by mortgage or deed of trust and the identity, due execution, validity, and recording of any such mortgage or deed of trust. This definition shall not be deemed to apply to the business of preparing and issuing abstracts of title to or ownership of property or certifying to the validity of documents relative to such titles. (10) “Multiple line insurance,” which is insurance combining on a mandatory basis in a single policy coverage coming within two or more of the kinds of insurance as defined in this chapter, other than title insurance, life insurance, or the granting of annuities, and for either a divisible or an indivisible rate or premium. (11) “Inland marine insurance” means any insurance that is defined by statute, rule, or general custom as inland marine insurance. (b) It is intended that certain insurance coverages may come within the definitions of two or more kinds of insurance as defined in this chapter, and the inclusion of such coverage within one definition shall not exclude it as to any other kind of insurance within the definition of which such coverage is likewise reasonably includible. Unless the context requires otherwise, a corporation engaged in the business described in subdivision (a)(1) of this section may also do any and all insurance business comprised in subdivision (a)(2) of this section relating to health insurance and subdivision (a)(3)(D) of this section relating to workers’ compensation. A corporation engaged in business comprised in any subdivision except subdivision (a)(1) of this section may do any business comprised in any of the other subdivisions except subdivision (a)(1) of this section, provided the requirements of law are complied with, and provided further that a company not engaged in writing a particular class of insurance on July 1, 1968, shall not write insurance of such class thereafter without approval of the Commissioner after he or she is satisfied that such insurance will be soundly underwritten on the strength of adequate capital and reserves considering the risks insured against and the experience, resources, and responsibility of the underwriter. In addition to any power to engage in any other kind of business besides an insurance business that may be specifically conferred by this part, an insurance company organized under this section may engage in other kinds of business to the extent necessarily or reasonably incidental to the kind or kinds of insurance business that it is authorized to do under this section. (c) Nothing in this section shall authorize a company to issue a policy of title insurance in this State until the applicant therefor has been notified in writing by such company of all defects in title that will be excluded from coverage under the prospective policy. Such notice shall set forth in descriptive terms the nature of such excluded defects. Upon receipt of such notice, the applicant shall have the option of cancelling his or her application without any liability therefor to said company. (d) Any corporation or organization that on July 1, 1968 had been organized and was existing under a special charter granted by the General Assembly prior hereto, or had been organized and was existing under insurance laws in effect prior hereto, may continue to do a business of insurance specified in this section and authorized by its charter under the continued supervision of the Commissioner. (e) The provisions of this title relating to the regulation of the business of insurance shall not apply to activities engaged in by ambulance services and first responder services for which they are licensed by the Department of Health pursuant to 24 V.S.A. chapter 71. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 1); amended 1981, No. 165 (Adj. Sess.), § 1; 1993, No. 166 (Adj. Sess.), § 1; 2021, No. 139 (Adj. Sess.), § 12, eff. May 27, 2022; 2023, No. 53, § 11, eff. June 8, 2023.

8 V.S.A. § 3301a Insurance defined

3301a. Insurance defined As used in this title, “insurance” means an agreement to indemnify or otherwise assume an obligation, provide services or any other thing of value on the happening of a particular event or contingency, or to provide indemnity for loss with respect to a specified subject by specified circumstances in return for a consideration. Without limiting the generality of the term, “insurance” shall include any business defined in section 3301 of this title, annuity contracts, and the business of health maintenance organizations and continuing care retirement communities. Added 2001, No. 71, § 2, eff. June 16, 2001.

8 V.S.A. § 3302 Plan of organization; incorporators

3302. Plan of organization; incorporators For the purpose of this chapter, an insurance company may be incorporated as a stock insurer with its capital divided into shares and owned by the stockholders, or a mutual insurer without capital stock the governing body of which is elected by its policyholders. There shall be not less than 15 incorporators of whom not less than two-thirds shall be citizens of this State. Except as provided in sections 4831 through 4856 of this title, no unincorporated association shall be formed after July 1, 1968, for the purpose of doing any insurance business in Vermont. Those domestic unincorporated associations that are doing insurance business of any kind under authority of the Commissioner on July 1, 1968, may continue to carry on their business subject to the provisions of this part. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 2); amended 1971, No. 31, § 2, eff. March 31, 1971.

8 V.S.A. § 3303 Mutual companies; directors, charter provisions as to

3303. Mutual companies; directors, charter provisions as to The articles of association or bylaws of a mutual insurer shall set forth the manner in which its board of directors or other governing body shall be elected, and in which meetings of policyholders shall be called, held, and conducted, subject to such procedures as may be required by the Commissioner under subsection 15(a) of this title. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 3); amended 1971, No. 51, § 1, eff. July 1, 1971; 2025, No. 23, § 2, eff. July 1, 2025.

8 V.S.A. § 3304 Capital and surplus requirements

3304. Capital and surplus requirements To qualify for authority to transact the business of insurance, a stock insurer seeking such authorization shall possess and thereafter maintain unimpaired paid-in capital of not less than $2,000,000.00 and, when first so authorized, shall possess and maintain free surplus of not less than $3,000,000.00. Such capital and surplus shall be in the form of cash or marketable securities, a portion of which may be held on deposit with the State Treasurer, such securities as designated by the insurer and approved by the Commissioner, in an amount and subject to such conditions determined by the Commissioner. Such conditions shall include a requirement that any interest or other earnings attributable to such cash or marketable securities shall inure to the benefit of the insurer until such time as the Commissioner determines that the deposit must be used for the benefit of the policyholders of the insurer or some other authorized public purpose relating to the regulation of the insurer. The Commissioner may prescribe additional capital or surplus for all stock insurers authorized to transact the business of insurance based upon the type, volume, and nature of insurance business transacted. The Commissioner may reduce or waive the capital and surplus amounts required by this section pursuant to a plan of dissolution for the company approved by the Commissioner. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 4); amended 1991, No. 101, § 1; 2003, No. 105 (Adj. Sess.), § 2; 2005, No. 36, § 9, eff. June 1, 2005.

8 V.S.A. § 3305 Petition; hearing

3305. Petition; hearing Before the articles of association are transmitted to the Secretary of State, the incorporators shall petition the Commissioner to hold a public hearing, in the county where the proposed corporation is to have its principal office, to determine whether the establishment and maintenance of the proposed corporation will promote the general good of the State. The Commissioner shall thereupon appoint a time and place in such county for hearing the petition and shall make an order for the publication of the substance of the petition and of the time and place of the hearing three weeks successively in a newspaper published in the county, or, for want thereof, in an adjoining county, the last publication to be at least 12 days before the day appointed for the hearing. If, after the hearing, the Commissioner finds and adjudges that the establishment and maintenance of the proposed corporation will promote the general good of the State, he or she shall give the incorporators a certificate to that effect under his or her seal. In determining the general good of the State as herein required, the Commissioner shall consider: (1) The character, reputation, financial standing, and purposes of the organizers, incorporators, and subscribers organizing the proposed insurer or organization. (2) The character, reputation, financial responsibility, insurance experience, and business qualifications of its proposed officers and directors. (3) Such other aspects of the proposed insurer or financing as he or she may deem advisable. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 5).

8 V.S.A. § 3306 Duties of Secretary of State, records

3306. Duties of Secretary of State, records The articles of association, the certificate, and the organization fee shall be transmitted to the Secretary of State, who shall thereupon record both the articles and the certificate. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 6).

8 V.S.A. § 3307 Consideration for stock

3307. Consideration for stock (a) The capital stock of a corporation doing any and all insurance and reinsurance comprised in any one or more of the subdivisions of section 3301 of this title shall be issued at not less than par and under any of the following conditions, subject to the approval of the Commissioner: (1) For cash. (2) For the stock of another insurance company on a reorganization or merger. (3) For the stock of the same insurance company at the same or a different par value or preference than that of the stock called for exchange. (4) As a stock dividend. Any increase in par value under subdivisions (2) and (3) of this subsection and of the stock dividend provided in this subdivision are chargeable against the issuing corporation’s surplus, undivided profits or a reserve established for that purpose. However, the limitations of this subdivision shall not exclude the payment of cash for a part of any increase in par value provided in subdivisions (2) and (3) of this subsection. (b) Whenever the charter or articles of association of an insurance company are so amended as to authorize an increase in its capital stock, it shall not be required to issue the whole amount of authorized increase, nor required to make any statement of capital except to the amount actually paid in or issued in accordance with the provisions of this chapter. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 7).

8 V.S.A. § 3308 List of stockholders; certificate to transact business; liability of president and directors

3308. List of stockholders; certificate to transact business; liability of president and directors When the entire capital stock of a corporation having capital stock has been issued, a complete list of the stockholders with the name and post office address of each and the number of shares held by each shall be filed with the Commissioner, who shall examine the corporation. If, after such examination, it appears that the whole capital stock has been paid in cash, and the Commissioner has considered the criteria in section 3361 of this chapter, the Commissioner shall issue a certificate under his or her seal authorizing the corporation to begin the transaction of business, which shall be filed with the Secretary of State. A corporation having capital stock shall not begin the transaction of business until the certificate has been issued and filed. If a corporation commences business before a certificate is issued and filed, the president and directors assenting thereto are personally liable for all debts incurred before the certificate is issued and filed. Amended 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 8); 2015, No. 15, § 1, eff. May 1, 2015.

8 V.S.A. § 3308a Reorganization formations

3308a. Reorganization formations Notwithstanding sections 3302, 3303, 3304, 3307, 3308, and 3309 of this title, the Commissioner may permit the formation of an insurance company without capital or surplus to be merged with or into or consolidated with an existing insurance company authorized to do business under this chapter for the purpose of facilitating a reorganization or acquisition transaction, including a triangular merger transaction, involving such existing company. There shall be no more than one authorized insurance company surviving reorganization under this section. Added 1997, No. 54, § 1, eff. June 26, 1997.

8 V.S.A. § 3309 Mutual insurers to commence business; when

3309. Mutual insurers to commence business; when (a) A corporation that, according to its charter, is not to have a capital stock shall not receive authorization to commence business until: (1) it complies with preliminary requirements for the procurement of an adequate amount of subscriptions for insurance and possesses and thereafter maintains unimpaired basic surplus of not less than $2,000,000.00 and, when first authorized, shall possess free surplus of not less than $3,000,000.00; and (2) the Commissioner has considered the criteria in section 3361 of this chapter. (b) The Commissioner in his or her discretion may establish lesser surplus amount requirements in the case of affiliated corporations jointly conducting the business of insurance under a pooling agreement. Such surplus shall be in the form of cash or marketable securities, a portion of which may be held on deposit with the State Treasurer, such securities as designated by the insurer and approved by the Commissioner, in an amount and subject to conditions determined by the Commissioner. The conditions shall include a requirement that any interest or other earnings attributable to cash or marketable securities shall inure to the benefit of the insurer until the Commissioner determines that the deposit must be used for the benefit of the policyholders of the insurer or some other authorized public purpose relating to the regulation of the insurer. The Commissioner may prescribe additional surplus based upon the type, volume, and nature of insurance business transacted. Amended 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 9); 1991, No. 101, § 2; 2003, No. 105 (Adj. Sess.), § 3; 2015, No. 15, § 2, eff. May 1, 2015.

8 V.S.A. § 3310 Amendment of charter

3310. Amendment of charter A corporation formed under the provisions of this chapter or by a special act of the Legislature may amend its articles of association or its charter as provided therein or in the absence of such provision by vote of three-fourths of its stockholders (in the case of a stock company) or members (in the case of a mutual company) present at a meeting thereof, provided the Commissioner, in all cases, on petition and after a hearing held substantially as is specified in section 3305 of this title, certifies that such amendment shall not be detrimental to the policyholders and such other persons as have an interest in said corporation. His or her certificate shall be recorded with the certificate of amendment. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 10).

8 V.S.A. § 3311 Quorum

3311. Quorum In the case of a mutual insurance company, the policyholders or annuitants therein, who attend a duly called meeting, shall constitute a quorum. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 11).

8 V.S.A. § 3312 Construction with other laws

3312. Construction with other laws (a) Corporations formed under the provisions of this subchapter shall have the privileges and be subject to the provisions of the general corporation law as well as the applicable provisions contained in this part. In the event of conflict between the provisions of the general corporation law and the provisions of this part, the latter shall control. Such corporations shall not be required to make any annual report except as provided in this part. (b) A corporation formed prior to July 1, 1968, for any purpose for which a corporation may be formed under this subchapter, with respect to all acts done after such date, shall be deemed to be within the provisions of this subchapter and of the general corporation law, in like manner as a corporation formed under this subchapter. But the foregoing provisions shall be subject to all such exceptions and qualifications as are contained in 11 V.S.A. § 2. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 12).

8 V.S.A. § 3313 Proxies

3313. Proxies (a) The Commissioner may prescribe by rules and regulations, the form, content and manner of solicitation of any proxy, consent, or authorization in respect of any voting security issued by a domestic insurer as necessary or appropriate in the public interest, or for protection of investors in the securities, or to ensure the fair dealing in the securities. (b) The term “voting security” as used in this section shall mean any instrument issued by a domestic stock insurance company that, in law or by contract, gives the holder the right to vote, consent, or authorize any corporate action of the insurer. (c) This section shall not apply to voting securities of a domestic insurer if the securities are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. (d) Any person, domestic insurer, or director, officer, or employee of the insurer, shall not solicit or permit the use of his or her name to solicit, by mail or otherwise, any person to give a proxy, consent, or authorization in respect of a voting security issued by the insurer in contravention of any rule or regulation made under this section. (e) Failure to comply with any rule or regulation made under this section shall be unlawful and any proxy or consent obtained in violation of this section or in contravention of any rule or regulation made thereunder shall be void. Any domestic insurer or any person who is legally entitled to vote, consent, or authorize by virtue of being the holder of record of such a security, or the Commissioner, if the other parties fail to act within 15 days after the date on which the vote was cast or counted, may enforce compliance with any rule or regulation made under this section, by appropriate civil action, except that no suit shall be brought more than 30 days after the date on which the vote, consent, or authorization was to have been effected. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 1, § 13).

8 V.S.A. § 3314 Annual financial statements; reports; filing fee

3314. Annual financial statements; reports; filing fee Notwithstanding any other provision of law, any insurer, of whatever form and description other than captive insurance companies organized under chapter 141 of this title, that is required by statute to file an annual statement or report of financial condition, shall pay a fee of $100.00 for filing its statement or report with the Commissioner. Added 1985, No. 236 (Adj. Sess.), § 13.

8 V.S.A. § 3315 Coordinated regulation

3315. Coordinated regulation Notwithstanding section 5112 of this title and any other provision of this title, the Commissioner may cooperate and coordinate with the insurance supervisory authorities of other states or through the facilities or subsidiaries of a national organization that facilitate regulatory efficiency and cooperation on a nationwide basis. The areas of cooperation and coordination contemplated by this section include the following: solvency oversight; company and producer licensing, appointment, and discipline; rate and forms review and approval; and investigation and examination of persons subject to the insurance laws of this State. The Commissioner may enter into agreements or contracts concerning the coordination and cooperation contemplated by this section with such other state or organization. The Commissioner may adopt, by rule, any uniform standards or procedures as are necessary to fully implement cooperative and coordinated supervision of the business of insurance. In the event of conflict between this provision and other pertinent provisions of parts 3 and 4 of this title, the Commissioner may elect that this provision prevail, if the Commissioner deems that such election is in the best interests of the State. Added 2001, No. 71, § 3, eff. June 16, 2001.

8 V.S.A. § 3316 Corporate governance; disclosure

3316. Corporate governance; disclosure (a) Purpose. The purpose of this section is to: (1) provide the Commissioner a summary of an insurer or insurance group’s corporate governance structure, policies, and practices so the Commissioner may gain and maintain an understanding of the insurer’s corporate governance framework; (2) outline the requirements for completing a corporate governance annual disclosure with the Commissioner; and (3) provide for the confidential treatment of the corporate governance annual disclosure and related information that contains confidential and sensitive information related to an insurer or insurance group’s internal operations and proprietary and trade secret information that, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage. (b) Scope. This section shall not be construed to prescribe or impose corporate governance standards and internal procedures beyond that which is required under applicable State corporate law. Nor shall it be construed to limit the Commissioner’s authority, or the rights or obligations of third parties, under section 13 of this title. (c) Application. The requirements of this section shall apply to all insurers domiciled in Vermont. (d) Definitions. As used in this section: (1) “Corporate Governance Annual Disclosure” or “CGAD” means a confidential report on corporate governance filed by the insurer or insurance group as required by this section. (2) “Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in subdivision 3681(6) of this title. (3) “Insurer” means an insurance company that offers any of the types of insurance itemized under subsection 3301(a) of this chapter, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state. It shall also mean an insurance group. (4) “ORSA Summary Report” means a report as defined in subdivision 3582(6) of this chapter. (e) Disclosure. (1) On or before June 1 of each year, beginning in the year 2016, an insurer shall submit to the Commissioner a CGAD, which contains the information described in subdivision (g)(2) of this section. Notwithstanding a request from the Commissioner made under subdivision (3) of this subsection, if the insurer is a member of an insurance group, the insurer shall submit the report required by this subsection to the Commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the National Association of Insurance Commissioners (NAIC). (2) The CGAD shall include a signature of the insurer’s chief executive officer or corporate secretary attesting to the best of that individual’s belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the insurer’s board of directors or the appropriate committee thereof. (3) An insurer not required to submit a CGAD under this section shall do so upon the Commissioner’s request. (4) For purposes of completing the CGAD, the insurer may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level, depending upon how the insurer has structured its system of corporate governance. The insurer is encouraged to make the CGAD disclosures at the level at which: the insurer’s risk appetite is determined; the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors is coordinated and exercised; or legal liability for failure of general corporate governance duties would be placed. If the insurer determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in level of reporting. (5) The review of the CGAD and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent Handbook referenced in subdivision (1) of this subsection. (6) Insurers providing information substantially similar to the information required by this section in other documents provided to the Commissioner, including proxy statements filed in conjunction with Form B requirements, or other state or federal filings provided to the Commissioner, shall not be required to duplicate that information in the CGAD, but shall only be required to cross reference the document in which the information is included. (f) Rules. The Commissioner may adopt rules and issue orders necessary to carry out the provisions of this section. (g)(1) CGAD contents. An insurer has discretion over the responses to CGAD inquiries, provided CGAD contains the material information necessary to permit the Commissioner to gain an understanding of the insurer’s corporate governance structure, policies, and practices. The Commissioner may request additional information he or she deems material and necessary to provide the Commissioner with a clear understanding of the corporate governance policies, and the reporting or information system or controls implementing those policies. (2) Notwithstanding subdivision (1) of this subsection, CGAD shall be prepared consistent with CGAD rules adopted by the Commissioner. Rules adopted by the Commissioner under this subdivision shall be consistent with the NAIC Model Regulation on CGAD. Documentation and supporting information shall be maintained and made available upon examination or upon request of the Commissioner. (h) Confidentiality. (1) Documents, materials, or other information, including CGAD, in the possession or control of the Department obtained or created by, or disclosed to the Commissioner or any other person under this section, are recognized by this State as being proprietary and to contain trade secrets. All such documents, materials, or other information are confidential and privileged, and are exempt from public inspection and copying under the Public Records Act. In addition, they are not subject to subpoena nor discovery, nor admissible in evidence in any private civil action. However, the Commissioner is authorized to use the documents, materials, or other information in furtherance of any regulatory or legal action brought as a part of the Commissioner’s official duties. The Commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer. Nothing in this subsection shall be construed to require written consent of the insurer before the Commissioner may share or receive confidential documents, materials, or other CGAD-related information pursuant to subdivision (3) of this subsection for the purpose of assisting in the performance of the Commissioner’s regular duties. (2) Neither the Commissioner nor any person who receives documents, materials, or other CGAD-related information, through examination or otherwise, while acting under the authority of the Commissioner, or with whom such documents, materials, or other information are shared pursuant to this section, is permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subdivision (1) of this subsection. (3) In order to assist in the performance of the Commissioner’s regulatory duties, the Commissioner may: (A) Upon request, share documents, materials, or other CGAD-related information including confidential and privileged documents, materials, or information subject to subdivision (1) of this subsection including proprietary and trade secret documents and materials with other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in subsection 3695(c) of this chapter, the NAIC, and with third-party consultants pursuant to subsection (i) of this section, provided the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and verifies in writing the legal authority to maintain confidentiality. (B) Receive documents, materials, or other CGAD-related information, including otherwise confidential and privileged documents, materials or information, including proprietary and trade-secret information or documents, from regulatory officials of other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in subsection 3695(c) of this chapter, and from the NAIC, and shall maintain as confidential or privileged any documents, materials, 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, materials, or information. (4) The sharing of information and documents by the Commissioner pursuant to this section does not constitute a delegation of regulatory authority or rulemaking, and the Commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this section. (5) A waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials, or other CGAD-related information shall not occur as a result of disclosure of such CGAD-related information or documents to the Commissioner under this section or as a result of sharing as authorized under this section. (i) NAIC and third-party consultants. (1) The Commissioner may retain, at the insurer’s expense, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner’s staff he or she deems reasonably necessary to assist with the review of the CGAD and related information or with the insurer’s compliance with this section. (2) A person retained under this subsection is under the direction and control of the Commissioner and shall act in a purely advisory capacity. (3) The NAIC and third-party consultants are subject to the same confidentiality standards and requirements as the Commissioner. (4) As part of the retention process, a third-party consultant shall verify to the Commissioner, with notice to the insurer, that it is free of a conflict of interest and that it has internal procedures in place to monitor compliance with a conflict and to comply with the confidentiality standards and requirements of this section. (5) A written agreement with the NAIC or a third-party consultant governing the sharing and use of information provided under this section shall contain the following provisions and expressly require the written consent of the insurer prior to making public such information: (A) Specific procedures and protocols for maintaining the confidentiality and security of CGAD-related information shared with the NAIC or a third-party consultant pursuant to this subdivision (5). (B) Procedures and protocols for sharing by the NAIC only with other state regulators from states in which an insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality. (C) A provision specifying that ownership of the CGAD-related information shared with the NAIC or a third-party consultant remains with the Department and that use of such information by the NAIC or a third-party consultant is subject to the direction of the Commissioner. (D) A provision prohibiting the NAIC and third-party consultants from storing the information in a permanent database after the underlying analysis is completed. (E) A provision requiring the NAIC and third-party consultants to provide prompt notice to the Commissioner and to the insurer regarding any subpoena, request for disclosure, or request for production of the insurer’s CGAD-related information. (F) A requirement that the NAIC and third-party consultants consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or third-party consultant pursuant to this section. (j) Sanctions. An insurer failing, without just cause, to timely file the CGAD as required by this section shall be required, after notice and hearing, to pay a penalty of $10,000.00 for each day’s delay, to be recovered by the Commissioner, and the penalty so recovered shall be paid into the General Fund of this State. The maximum penalty under this section is $1,000,000.00. The Commissioner may reduce the penalty if the insurer demonstrates to the Commissioner that the imposition of the penalty would constitute a financial hardship to the insurer. (k) Severability clause. If any provision of this section other than subsection (h), or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this section that can be given effect without the invalid provision or application, and to that end the provisions of this section, with the exception of subsection (h), are severable. Added 2015, No. 10, § 1, eff. May 1, 2015.

8 V.S.A. § 3317 Insurance Regulatory and Supervision Fund

3317. Insurance Regulatory and Supervision Fund (a) There is hereby created a fund to be known as the Insurance Regulatory and Supervision Fund for the purpose of providing the financial means for the Commissioner of Financial Regulation to administer Part 3 of this title, and except as provided under subsection 6017(a) of this title. All fees and assessments received by the Department pursuant to such administration shall be credited to this Fund. All fines and administrative penalties, however, shall be deposited directly into the General Fund. (b) All payments from the Insurance Regulatory and Supervision Fund for the maintenance of staff and associated expenses, including contractual services as necessary, shall be disbursed from the State Treasury only upon warrants issued by the Commissioner of Finance and Management, after receipt of proper documentation regarding services rendered and expenses incurred. (c) Annually, $30,000.00 shall be transferred from the Fund to the Fire Service Training Council Special Fund established in 20 V.S.A. § 3157. (d) At the end of each fiscal year, the balance in the Insurance Regulatory and Supervision Fund shall be transferred to the General Fund. (e) The Commissioner of Finance and Management may anticipate receipts to the Insurance Regulatory and Supervision Fund and issue warrants based thereon. Added 1985, No. 242 (Adj. Sess.), § 310; amended 1989, No. 225(Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a); 1999, No. 49, § 216; 1999, No. 87 (Adj. Sess.), § 4; 2003, No. 80 (Adj. Sess.), § 75, eff. March 8, 2004; 2005, No. 71, § 268; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; recodified 2025, No. 142 (Adj. Sess.), §§ 56-57, eff. July 1, 2026.

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