Title 08, Banking and Insurance

§ 4174. Construction This chapter shall be liberally construed to effect the purpose under section 4172 of this chapter, which shall constitute an aid and guide to interpretation. (Added 2023, No. 32, § 9, eff. July 1, 2023.)

§ 4175. Definitions As used in this chapter: (1) “Account” means either of the two accounts created under section 4176 of this chapter. (2) “Affiliate” means affiliate as defined in section 3681 of this title. (3) “Association” means the Vermont Life and Health Insurance Guaranty…

§ 4176. Creation of the Association (a) There is created a nonprofit legal entity to be known as the Vermont Life and Health Insurance Guaranty Association. All member insurers shall be and remain members of the Association as a condition of their authority to transact insurance …

§ 4177. Board of Directors (a) The Board of Directors of the Association shall consist of not less than seven nor more than 11 member insurers serving terms as established in the plan of operation. Members of the Board shall be selected by member insurers subject to the approval …

§ 4178. Powers and duties of the Association (a) If a member insurer is an impaired insurer, the Association may, in its discretion and subject to any conditions imposed by the Association that do not impair the contractual obligations of the impaired insurer and that are approve…

§ 4179. Assessments (a) For the purpose of providing the funds necessary to carry out the powers and duties of the Association, the Board of Directors shall assess the member insurers, separately for each account, at such times and for such amounts as the Board finds necessary. A…

§ 4180. Plan of operation (a)(1) The Association shall submit to the Commissioner a plan of operation and any amendments to the plan necessary or suitable to ensure the fair, reasonable, and equitable administration of the Association. The plan of operation and any amendments to …

§ 4181. Duties and powers of the Commissioner (a) In addition to the duties and powers enumerated elsewhere in this chapter, the Commissioner shall: (1) Upon the request of the Board of Directors, provide the Association with a statement of the premiums in Vermont and in any othe…

§ 4182. Prevention of insolvencies (a) To aid in the detection and prevention of member insurer impairment or insolvency, it shall be the duty of the Commissioner to: (1) Notify the commissioners of all the other states within 30 days following the action taken or the date the ac…

§ 4183. Credits for assessments paid (a) A member insurer may offset against its premium tax liability to Vermont an assessment described in subsection 4179(h) of this chapter to the extent of 20 percent of the amount of the assessment for each of the five calendar years followin…

§ 4184. Miscellaneous provisions (a) This chapter shall not be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability. (b)(1) Records shall be kept of all meetings of the Board …

§ 4185. Examination; annual report The Association shall be subject to examination and regulation by the Commissioner. The Board of Directors shall submit to the Commissioner, not later than May 1 of each year, a financial report for the preceding calendar year in a form approved…

§ 4186. Tax exemptions The Association shall be exempt from payment of all fees and all taxes levied by Vermont or any of its subdivisions, except taxes levied on real property. (Added 2023, No. 32, § 9, eff. July 1, 2023.)

§ 4187. Immunity There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer or its agents or employees, the Association or its agents or employees, members of the Board of Directors, or the Commissioner or the Commission…

§ 4188. Stay of proceedings; reopening default judgments All proceedings in which the insolvent insurer is a party in any court in Vermont shall be stayed 180 days from the date an order of liquidation, rehabilitation, or conservation is final to permit proper legal action by the…

§ 4189. Prohibited advertisement; notice to policy owners (a) No person, including a member insurer, or agent or affiliate of a member insurer, shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, dissemi…

§ 4190. Prospective application (a) This chapter shall apply to all matters relating to any impaired or insolvent insurer for which the Association first became obligated on or after July 1, 2023. (b) Matters relating to any impaired or insolvent insurer for which the Association…

§ 4201. Filing and approval of policies; review A policy of insurance covering against loss or damage resulting from accident to, or injury suffered by an employee or other person, and for which the insured is liable, shall not be issued or delivered to a person, firm, or corpora…

§ 4201a. Filing fees Each filing of a policy or contract form or document, submitted pursuant to section 4201 of this title, shall be accompanied by payment to the Commissioner of a nonrefundable fee of $50.00 per filing submission. (Added 1985, No. 236 (Adj. Sess.), § 9; amended…

§ 4202. Form and contents of policy A policy shall not be issued or delivered under this chapter unless: (1) every printed portion of the policy and any endorsement or attached papers are plainly printed; (2) a brief description of the policy is plainly printed on the first page;…

§ 4203. Required conditions Each policy issued and delivered under this chapter shall contain in substance the following conditions: (1) The company shall pay and satisfy any judgment that may be recovered against the insured upon any claim covered by this policy to the extent an…

§ 4204. Illegal provisions A policy shall not be issued or delivered under this chapter if it contains a provision contradictory, in whole or in part, to any of the provisions of sections 4201–4203 and 4205–4209 of this title; nor shall any endorsements or attached papers vary, a…

§ 4205. Effect of false statement in application The falsity of a statement in the application for a policy covered by the provisions of this chapter shall not bar the right to recovery under the policy unless such false statement was made with actual intent to deceive or unless …

§ 4206. Acts not constituting waivers The acknowledgment by an insurer of the receipt of notice given under a policy covered by the provisions of this chapter, or the furnishing of forms for filing proofs of loss, or the acceptance of such proofs, or the investigation of a claim …

§ 4207. Penalty for unauthorized alterations An alteration of a written application for insurance by erasure, insertion, or otherwise shall not be made by a person other than the applicant without his or her written consent, and a person making such alteration without the consent…

§ 4208. Construction of illegal policies A policy issued in violation of the provisions of this chapter shall be held valid but shall be construed as provided in the provisions of this chapter. When a provision in a policy is in conflict with the provisions of this chapter, the r…

§ 4209. Penalties A company, corporation, association, society, or other insurer or any officer or agent thereof that issues or delivers to a person in this State a policy in willful violation of the provisions of this chapter shall pay an administrative penalty of not more than …

§ 4210. Cost of examinations The insurer under any motor vehicle liability insurance policy shall bear the cost of all physical examinations imposed on the insured or proposed insured as a condition for issuance or renewal of the policy. (Added 1971, No. 108.)

§ 4211. Volunteer drivers (a) An insurer may not refuse to issue motor vehicle liability insurance to an applicant solely because the applicant is a volunteer driver. An insurer may not impose a surcharge or otherwise increase the rate for a motor vehicle policy solely on the bas…

§ 4222. Definitions The following definitions, unless otherwise specified or qualified, shall be applicable to this subchapter: (1) “Policy” means an automobile liability policy providing bodily injury liability, property damage liability, medical payments, and uninsured motorist…

§ 4223. Cancellation of automobile insurance (a) A notice of cancellation of a policy shall be effective only if it is based on one or more of the following reasons: (1) nonpayment of premium; (2) fraud or material misrepresentation affecting the policy or in the presentation of …

§ 4224. Notice of cancellation (a) No notice of cancellation of a policy of insurance to which section 4223 of this title applies or of a policy issued under the Vermont Automobile Insurance Plan shall be effective unless mailed or delivered by the insurer to the named insured at…

§ 4225. Notice of nonrenewal No insurer shall refuse to renew a policy of insurance unless such insurer or its agent shall mail or deliver to the named insured, at the address shown in the policy, at least 45 days’ advance notice of its intention not to renew. This section shall …

§ 4225a. Renewal policies (a) If the insurer has the necessary information to issue the renewal policy, the insurer shall confirm in writing at least 45 days prior to expiration its intention to renew the policy and the premium at which the policy is to be renewed. The insured sh…

§ 4226. Notice requirements When notice required under section 4224 or 4225 of this title is provided by mail, such notice shall be by certified mail, except that in the case of cancellation for nonpayment of premium, notice shall be by certified mail, certificate of mailing, or …

§ 4227. Notice of eligibility When automobile bodily injury and property damage liability coverage is cancelled, other than for nonpayment of premium, or in the event of failure to renew automobile bodily injury and property damage liability coverage to which section 4225 of this…

§ 4228. Required renewals; continuation of agents’ contracts and brokers’ accounts (a) In the event of an insurer’s cancellation of an agent’s contract or a broker’s account placement authority with such insurer, each policyholder of such an agent or broker shall be entitled to r…

§ 4229. Penalties A person who violates a provision of this subchapter may be subject to an administrative penalty of $2,000.00 for each violation. (Added 1995, No. 167 (Adj. Sess.), § 14a.)

§ 4241. Vermont Automobile Insurance Plan All insurers licensed to transact business in this State, for the issuance of automobile insurance against bodily injury, property damage, medical payments, or other loss, including what are commonly known as “liability,” “collision,” “co…

§ 4242. General provisions of Plan The Plan shall provide: (1) reasonable rules for the distribution of risks on an equitable basis under either a pooled or assigned plan; (2) rates applicable to, and based upon, that class of risks as described in section 4241 of this title to w…

§ 4243. Submission and approval of Plan (a) A plan conforming to the standards of section 4242 of this title shall be submitted to the Commissioner within 90 days of July 1, 1969. Each insurer and advisory or service organization described in section 4241 of this title shall file…

§ 4244. Commissioner to formulate Plan (a) If no Plan conforming to the standards of section 4242 of this title is submitted to the Commissioner within 90 days of July 1, 1969 or within the time provided for in any order of disapproval, the Commissioner shall prepare and promulga…

§ 4245. Insurers to participate in Plan After approval of or preparation and promulgation of the Plan, every insurer licensed to transact business in this State shall participate in the Plan according to its provisions as described in section 4241 of this title. (1969, No. 63, § …

§ 4246. Insurer or rating organization; conduct of If the Commissioner finds that the conduct of any insurer or advisory or service organization is not in conformity with the Plan, he or she may, after hearing, order the cessation of the conduct complained of. Further conduct in …

§ 4247. Definitions As used in this subchapter: (1) “Commissioner” means the Commissioner of Financial Regulation. (2) “Consumer” means a natural person who buys other than for purposes of resale any tangible personal property that is distributed in commerce and that is normally …

§ 4248. Registration required (a) All providers of service contracts issued, sold, or covering property located in this State shall file a registration with the Commissioner on a form prescribed by the Commissioner. Such registrations shall be renewed every three years. Providers…