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Affiliated Reinsurance Companies

V.S.A. tit. 8, ch. 141, subch. 5
in effect

8 V.S.A. § 6049a Applicable law

6049a. Applicable law (a) An affiliated reinsurance company shall be subject to the provisions of this subchapter and to the provisions of subchapter 1 of this chapter. In the event of any conflict between the provisions of this subchapter and the provisions of subchapter 1 of this chapter, the provisions of this subchapter shall control. (b) An affiliated reinsurance company shall be subject to all applicable rules adopted pursuant to section 6015 of this chapter that are in effect as of July 1, 2018 and those that are adopted after July 1, 2018. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049b Definitions

6049b. Definitions As used in this subchapter: (1) “Affiliated reinsurance company” means a company licensed by the Commissioner pursuant to this subchapter to reinsure risks ceded by one or more ceding insurers that are affiliated companies. Subject to the prior approval of the Commissioner, not more than 10 percent of the risks reinsured may be ceded by ceding insurers that are not affiliated companies. (2) “Ceding insurer” means an insurance company approved by the Commissioner and licensed or otherwise authorized to transact the business of insurance or reinsurance in its state or country of domicile, which cedes risk to an affiliated reinsurance company pursuant to a reinsurance contract. (3) “Organizational documents” means the affiliated reinsurance company’s articles of incorporation and bylaws and such other documents as shall be approved by the Commissioner. (4) “Reinsurance contract” means a contract between an affiliated reinsurance company and a ceding insurer pursuant to which the affiliated reinsurance company agrees to provide reinsurance to the ceding insurer. Added 2017, No. 134 (Adj. Sess.), § 10; amended 2019, No. 110 (Adj. Sess.), § 11A, eff. June 15, 2020.

8 V.S.A. § 6049c Licensing; authority

6049c. Licensing; authority (a) An affiliated reinsurance company shall only reinsure the risks of a ceding insurer. An affiliated reinsurance company may cede the risks assumed under a reinsurance contract to another reinsurer, subject to the prior approval of the Commissioner. (b) In conjunction with the issuance of a license to an affiliated reinsurance company, the Commissioner may issue an order that includes any provisions, terms, and conditions regarding the organization, licensing, and operation of the affiliated reinsurance company that are deemed appropriate by the Commissioner and that are not inconsistent with the provisions of this chapter. (c) To qualify for a license, an affiliated reinsurance company shall be subject, in addition to the requirements of subsection 6002(c) of this chapter, to the following: (1) The information submitted to the Commissioner pursuant to subdivision 6002(c)(1)(B) of this chapter shall include: (A) the source and form of the affiliated reinsurance company’s capital and surplus; (B) the investment policy of the affiliated reinsurance company, which shall provide for a diversified investment portfolio both as to type and issue and shall include a requirement for liquidity and for the reasonable preservation, administration, and management of such assets with respect to the risks associated with any reinsurance transactions. (2) The application shall include copies of all agreements and documentation, including reinsurance agreements, described in subdivision (1) of this subsection (c) unless otherwise approved by the Commissioner and any other statements or documents required by the Commissioner to evaluate the affiliated reinsurance company’s application for licensure. (d) Subdivision 6002(c)(3) of this chapter shall apply to all information submitted pursuant to subsection (c) of this section and to any order issued to the affiliated reinsurance company pursuant to subsection (b) of this section. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049d Formation

6049d. Formation (a) An affiliated reinsurance company may be incorporated as a stock insurer with its capital divided into shares, or in such other organizational form as may be approved by the Commissioner. (b) An affiliated reinsurance company’s organizational documents shall limit the affiliated reinsurance company’s authority to the transaction of the business of insurance or reinsurance and to those activities that the affiliated reinsurance company conducts to accomplish its purposes as expressed in this subchapter. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049e Minimum capital and surplus

6049e. Minimum capital and surplus An affiliated reinsurance company shall not be issued a license unless it possesses and thereafter maintains unimpaired paid-in capital and surplus of not less than $5,000,000.00. The Commissioner may prescribe additional capital and surplus based upon the type, volume, and nature of reinsurance business transacted. Except as otherwise provided in this section, the provisions of chapter 159 of this title, Risk Based Capital for Insurers, shall apply in full to an affiliated reinsurance company. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049f Permitted reinsurance

6049f. Permitted reinsurance (a) An affiliated reinsurance company shall only reinsure the risks of a ceding insurer, pursuant to a reinsurance contract. An affiliated reinsurance company shall not issue a contract of insurance or a contract for assumption of risk or indemnification of loss other than such reinsurance contract. (b) The reinsurance contract shall contain all provisions reasonably required or approved by the Commissioner, which requirements shall take into account the laws applicable to the ceding insurer regarding the ceding insurer’s taking credit for the reinsurance provided under such reinsurance contract. (c) An affiliated reinsurance company may cede risks assumed through a reinsurance contract to one or more reinsurers through the purchase of reinsurance, subject to the prior approval of the Commissioner. Except as otherwise provided in this section, the provisions of chapter 101, subchapter 10 of this title, reinsurance of risks, shall apply in full to an affiliated reinsurance company. (d) Unless otherwise approved in advance by the Commissioner, a reinsurance contract shall not contain any provision for payment by the affiliated reinsurance company in discharge of its obligations under the reinsurance contract to any person other than the ceding insurer or any receiver of the ceding insurer. (e) An affiliated reinsurance company shall notify the Commissioner immediately of any action by a ceding insurer or any other person to foreclose on or otherwise take possession of collateral provided by the affiliated reinsurance company to secure any obligation of the affiliated reinsurance company. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049g Disposition of assets; investments

6049g. Disposition of assets; investments (a) The assets of an affiliated reinsurance company shall be preserved and administered by or on behalf of the affiliated reinsurance company to satisfy the liabilities and obligations of the affiliated reinsurance company incident to the reinsurance contract and other related agreements. (b) The Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the affiliated reinsurance company unless the investment is otherwise approved in its plan of operation or in an order issued to the affiliated reinsurance company pursuant to subsection 6049c of this chapter. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049h Annual report; books and records

6049h. Annual report; books and records (a) For the purposes of subsection 6007(b) of this chapter: (1) Each affiliated reinsurance company shall file its report in the form required by subsection 3561(a) of this title, and each affiliated reinsurance company shall comply with the requirements set forth in section 3569 of this title. (2) An affiliated reinsurance company shall report using statutory accounting principles in accordance with the National Association of Insurance Commissioner’s Accounting Practices and Procedures Manual. Reporting shall be in such general form and context, as approved by, and shall contain any other information required by, the National Association of Insurance Commissioners, with any useful or necessary modifications or adaptions 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. (b) Unless otherwise approved in advance by the Commissioner, an affiliated reinsurance company shall maintain its books, records, documents, accounts, vouchers, and agreements in this State. An affiliated reinsurance company shall make its books, records, documents, accounts, vouchers, and agreements available for inspection by the Commissioner at any time. An affiliated reinsurance company shall keep its books and records in such manner that its financial condition, affairs, and operations can be readily ascertained and so that the Commissioner may readily verify its financial statements and determine its compliance with this chapter. (c) Unless otherwise approved in advance by the Commissioner, all books, records, documents, accounts, vouchers, and agreements shall be preserved and kept available in this State for the purpose of examination and inspection and until such time as the Commissioner approves the destruction or other disposition of such books, records, documents, accounts, vouchers, and agreements. If the Commissioner approves the keeping outside this State of the items listed in this subsection, the affiliated reinsurance company shall maintain in this State a complete and true copy of each such item. Books, records, documents, accounts, vouchers, and agreements may be photographed, reproduced on film, or stored and reproduced electronically. (d) The provisions of sections 3578a (annual financial reporting) and 3579 (qualified accountants) of this title shall apply in full to an affiliated reinsurance company. Added 2017, No. 134 (Adj. Sess.), § 10; amended 2019, No. 3, § 8, eff. April 18, 2019; 2023, No. 12, § 5, eff. May 8, 2023.

8 V.S.A. § 6049i Insurance holding company systems

6049i. Insurance holding company systems Except as otherwise provided in this section, the provisions of chapter 101, subchapter 13 of this title shall apply in full to an affiliated reinsurance company. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049j Corporate governance; disclosure

6049j. Corporate governance; disclosure Except as otherwise provided in this section, the provisions of section 3316 of this title shall apply in full to an affiliated reinsurance company. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049k Own risk and solvency assessment

6049k. Own risk and solvency assessment Except as otherwise provided in this section, the provisions of chapter 101, subchapter 7A (own risk and solvency assessment) of this title shall apply in full to an affiliated reinsurance company. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049l Requirements for actuarial opinions

6049l. Requirements for actuarial opinions Except as otherwise provided in this section, the provisions of chapter 101, section 3577 (requirements for actuarial opinions) of this title shall apply in full to an affiliated reinsurance company. Added 2017, No. 134 (Adj. Sess.), § 10.

8 V.S.A. § 6049m Confidentiality

6049m. Confidentiality (a) Subdivision 6002(c)(3) of this title and subsection 6008(c) of this title shall apply to all documents, materials, and other information, including confidential and privileged documents, examination reports, preliminary examination reports or results, working papers, recorded information, and copies of any of these produced by, obtained by, or disclosed to the Commissioner or any other person in the course of an examination made under this subchapter. (b) In furtherance of the Commissioner’s regulatory duties, the Commissioner may share and receive documents, materials, or other information pursuant to section 22 of this title. (c) [Repealed.] Added 2017, No. 134 (Adj. Sess.), § 10; amended 2023, No. 110 (Adj. Sess.), § 11, eff. July 1, 2024.
Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/141Fetched: 10/21/2026

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