Actions and Penalties

V.S.A. tit. 8, ch. 101, subch. 12

in effect

8 V.S.A. § 3661 Cease and desist powers; prosecutions and penalties

3661. Cease and desist powers; prosecutions and penalties (a) When the Commissioner believes that an insurer or an officer or agent thereof, or any other person, has violated the law, an administrative rule of the Department, or an order of the Commissioner relating to insurance, or has not complied with its requirements, he or she: (1) may issue an order to cease and desist such violation or activity. Such an order shall be subject to de novo judicial review in the Washington Superior Court, but such review shall not stay the enforcement of the Commissioner’s order while under review, unless the court shall so determine after a preliminary hearing that a stay of enforcement will not unduly injure the interests of the people of the State, in which case a stay of execution may be granted; (2) may report each violation with any information he or she has relating thereto to the Attorney General who shall prosecute therefor if he or she deems it advisable. The offender shall be fined not more than $2,000.00 as a result of any such prosecution by the Attorney General; and (3) may, after notice and opportunity for hearing, impose a civil administrative penalty of not more than $1,000.00 for each violation, and not more than $10,000.00 for each willful violation. (b) The powers vested in the Commissioner by this section shall be in addition to any other powers to enforce penalties, fines, or forfeitures authorized by law with respect to violations of the law relating to insurance, except that the Commissioner shall not impose an administrative penalty under subdivision (a)(3) of this section if the Commissioner may impose another administrative penalty authorized by law for the same violation. (c) An employer who makes a false statement or representation that results in a lower workers’ compensation premium, after notice and opportunity for hearing before the Commissioner, may be assessed an administrative penalty of not more than $20,000.00 in addition to any other appropriate penalty. In addition, an employer found to have violated this section is prohibited from contracting, directly or indirectly, with the State or any of its subdivisions for up to three years following the date the employer was found to have made a false statement or misrepresentation, as determined by the Commissioner in consultation with the Commissioner of Buildings and General Services or the Secretary of Transportation, as appropriate. Either the Secretary or the Commissioner, as appropriate, shall be consulted in any appeal relating to prohibiting the employer from contracting with the State or its subdivisions. (d) Any person who knowingly makes a false statement or representation in an application, petition, certification, or verification made in accordance with the provisions of this title, or of 18 V.S.A. chapter 221, or a certification or other filing with the Interstate Insurance Product Regulation Commissioner under chapter 165 of this title, after notice and opportunity for hearing before the Commissioner of Financial Regulation, may be assessed an administrative penalty of not more than $5,000.00. The authority granted to the Commissioner by this subsection shall be in addition to any other authority granted to the Commissioner by law. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 13, § 1); amended 1983, No. 199 (Adj. Sess.); 2003, No. 105 (Adj. Sess.), § 7; 2009, No. 42, § 9; 2009, No. 54, § 78, eff. June 1, 2009; 2009, No. 142 (Adj. Sess.), § 5a; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.

8 V.S.A. § 3662 Nonpayment of judgment; penalty

3662. Nonpayment of judgment; penalty In addition to accrual of interest and costs under section 3665 of this title, if a judgment against an insurance company is not paid within 30 days after demand made upon an agent of such company, and notice thereof given to the Commissioner by the officer holding the execution, the Commissioner may suspend the right of the company to do business in this State until it is paid. If such company, or an agent thereof, after notice of such suspension, shall issue a policy in this State, such company and agent shall each be subject to an administrative penalty of not more than $10,000.00 for each policy. A policy so granted shall be valid against the company. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 13, § 2); amended 1987, No. 106, § 1; 1995, No. 167 (Adj. Sess.), § 6.

8 V.S.A. § 3663 Minimum limitation on actions; void policy provisions

3663. Minimum limitation on actions; void policy provisions A policy of fire, life, accident, liability, or burglary insurance, or an indemnity, surety, or fidelity contract or bond issued or delivered in this State by an insurance company doing business herein, shall not contain a condition or clause limiting the time of commencement of an action on such policy or contract to a period less than 12 months from the occurrence of the loss, death, accident, or default, nor a condition or clause making an award by appraisers, fixing the amount of loss by the insured or beneficiary in such policy or contract, a condition precedent to bringing or maintaining an action on such policy or contract. Any such conditions or clauses shall be null and void. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 13, § 3).

8 V.S.A. § 3664 Forms; filing proof of loss and other documents; waiver of filing

3664. Forms; filing proof of loss and other documents; waiver of filing Insurance companies, societies, or associations, or insurance adjusters appointed by said companies, societies, or associations, shall furnish in form for completion by the claimant, as defined in section 3665a of this title, or beneficiary, as defined in section 3665b of this title, all documents as to proof of loss or other matter required by contract to be submitted to the companies. Failure to furnish said forms within a reasonable time after notice of loss or damage is received by said companies, societies, or associations shall be deemed a waiver of any requirement that proof of loss shall be filed with the insurer on said forms as a condition precedent to the recovery of losses or claims. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 13, § 4); amended 2019, No. 103 (Adj. Sess.), § 13.

8 V.S.A. § 3665a Timely payment of property and casualty insurance claims; interest

3665a. Timely payment of property and casualty insurance claims; interest (a) This section applies to policies of property, casualty, surety, and title insurance, as defined in section 3301 of this title. It does not apply to workers’ compensation insurance. As used in this section, “claimant” means any person asserting a right to payment under an insurance policy or contract arising out of the occurrence of the contingency or loss covered by such policy or contract or any person asserting a claim against any other person or the interests insured under an insurance policy or contract, and includes a claimant’s designated legal representative and any member of the claimant’s immediate family designated in writing by the claimant. (b) Unless a different time period is specified in another section of this title, all payments of claims under policies of insurance shall be made within time periods provided by this section: (1) For claims under policies of insurance other than surety insurance and title insurance, within 10 business days after the date that settlement of the claim is agreed upon between the insurer, the claimant, and the loss payee, as applicable, and in accordance with rules adopted by the Commissioner. (2) For claims under policies of surety and title insurance, within 30 days after the date that settlement of the claim is agreed upon between the insurer, the claimant, and the loss payee, as applicable, and in accordance with rules adopted by the Commissioner. (3) If a claim is contested, within 30 days after the entry of a final nonappealable judgment against the insurer; the entry of a binding arbitration decision between the insurer, the claimant, the loss payee, and the Department, as applicable; or the execution of a settlement agreement between the insurer, the claimant, the loss payee, and the Department, as applicable. (c) If an insurer fails to pay a claim within the applicable time period set forth in subsection (b) of this section or any other time period provided by statute, it shall thereafter pay interest on the amount of the claim at the judgment rate allowed by law. Interest shall accrue from 30 days after the date the insurer receives a properly executed proof of loss. Added 2019, No. 103 (Adj. Sess.), § 15.

8 V.S.A. § 3665b Timely payment of life insurance claims and annuity death benefits; interest

3665b. Timely payment of life insurance claims and annuity death benefits; interest (a) This section applies to policies of life insurance and contracts of annuity. As used in this section, a “beneficiary” means any person making a claim against a policy of life insurance or for death benefits provided under a contract of annuity. (b) A claim for payment of benefits under a policy of life insurance shall be paid within 30 days after the date that a properly executed proof of loss is received by the insurer. All payments of claims under policies of life insurance shall include interest accrued from the date of death of the insured to the date of payment. The interest rate shall be the rate paid on proceeds left on deposit or six percent, whichever is greater. (c) A claim for payment of benefits under a contract of annuity shall be paid within 30 days after the date that a properly executed proof of loss is received by the insurer. Payments of claims for death benefit proceeds under contracts of annuity shall include interest at the rate paid for proceeds left on deposit or six percent, whichever is greater. Interest shall accrue and be payable as follows: (1) For variable annuity contracts subject to the Securities and Exchange Commission’s rules governing the liquidation of account values at the death of the beneficiary, from the eighth day following the date that a properly executed proof of loss is received by the insurer. (2) For all other contracts of annuity, from the date of death of the measuring life, unless the contract specifies that the contract remains in force until the date that a properly executed proof of loss is received by the insurer. For purposes of this section, the individual whose death triggers the death benefit proceeds is the measuring life. (d) If a claim is contested, it shall be paid within 30 days after the entry of a final nonappealable judgment against the insurer; the entry of a binding arbitration decision between the insurer, the beneficiary, and the Department, as applicable; or the execution of a settlement agreement between the insurer, the beneficiary, and the Department, as applicable. (e) If an insurer fails to pay a claim within the applicable time period set forth in subsection (b), (c), or (d) of this section, it shall thereafter pay interest on the amount of the claim at the judgment rate allowed by law. Interest shall accrue from 30 days after the date the insurer receives a properly executed proof of loss. Added 2019, No. 103 (Adj. Sess.), § 16.

8 V.S.A. § 3665c Damages

3665c. Damages An insurance company, including a society and an association, is responsible for payment of any consequential damages, including all penalties or costs, caused by improper delay in payment or settlement of claims to claimants, loss payees, or beneficiaries under policies of insurance subject to section 3665a or 3665b of this title. Consequential damages for improper delay are not applicable when a policy expressly provides for periodic payments or when a claimant, loss payee, or beneficiary agrees to accept periodic payments, unless an insurer improperly delays making such periodic payments. Added 2019, No. 103 (Adj. Sess.), § 17.

8 V.S.A. § 3666 Rules; methods of notice

3666. Rules; methods of notice Notwithstanding the requirements under sections 3883, 4226, and 4714 of this title, the Commissioner of Financial Regulation shall adopt rules specifying the methods by which a notice to a party required under section 3880, 3881, 4224, 4225, 4712, or 4713 of this title shall be given. Added 2013, No. 199 (Adj. Sess.), § 68.

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