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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

145

:
SUPERVISION, REHABILITATION, AND LIQUIDATION OF INSURERS






Subchapter

003
:
FORMAL PROCEEDINGS










 

§

7066. Fraudulent transfer after petition

(a) After a

petition for rehabilitation or liquidation has been filed, a transfer of any of

the real property of the insurer made to a person acting in good faith shall be

valid against the receiver if made for a present fair equivalent value; or, if

not made for a present fair equivalent value, then to the extent of the present

consideration actually paid, for which amount the transferee shall have a lien

on the property so transferred. The commencement of a proceeding in

rehabilitation or liquidation shall be constructive notice upon the recording

of a copy of the petition for or order of rehabilitation or liquidation with

the recorder of deeds in the county where any real property in question is

located. The exercise by a court of the United States or any state or

jurisdiction to authorize or effect a judicial sale of real property of the

insurer within any county in any state shall not be impaired by the pendency of

such a proceeding unless the copy is recorded in the county prior to the

consummation of the judicial sale.

(b) After a

petition for rehabilitation or liquidation has been filed and before either the

receiver takes possession of the property of the insurer or an order of

rehabilitation or liquidation is granted:

(1) A transfer

of any of the property of the insurer, other than real property, made to a

person acting in good faith shall be valid against the receiver if made for a

present fair equivalent value; or, if not made for a present fair equivalent

value, then to the extent of the present consideration actually paid, for which

amount the transferee shall have a lien on the property so transferred.

(2) A person

indebted to the insurer or holding property of the insurer may, if acting in

good faith, pay the indebtedness or deliver the property, or any part thereof,

to the insurer or upon his or her order, with the same effect as if the

petition were not pending.

(3) A person

having actual knowledge of the pending rehabilitation or liquidation shall be

deemed not to act in good faith.

(4) A person

asserting the validity of a transfer under this section shall have the burden

of proof. Except as elsewhere provided in this section, no transfer by or on

behalf of the insurer after the date of the petition for liquidation by any

person other than the liquidator shall be valid against the liquidator.

(c) Every person

receiving any property from the insurer or any benefit thereof which is a

fraudulent transfer under subsection (a) of this section shall be personally

liable therefore and shall be bound to account to the liquidator.

(d) Nothing in

this chapter shall impair the negotiability of currency or negotiable

instruments. (Added 1991, No. 45, § 2, eff. May 29, 1991.)