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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

101

:
INSURANCE COMPANIES GENERALLY






Subchapter

009
:
PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION










 

§

3620. Prevention of insolvencies

To aid in the

detection and prevention of insurer insolvencies:

(1) It shall be

the duty of the board of directors, upon majority vote, to notify the

commissioner of any information indicating any member insurer may be insolvent

or in a financial condition hazardous to the policyholders or the public.

(2) The board of

directors may, upon majority vote, request that the commissioner order an

examination of any member insurer which the board in good faith believes may be

in a financial condition hazardous to the policyholders or the public. Within

30 days of the receipt of such request, the commissioner shall begin such

examination. The examination may be conducted as a National Association of

Insurance Commissioners examination or may be conducted by such persons as the

commissioner designates. The cost of such examination shall be paid by the

association and the examination report shall be treated as are other

examination reports. In no event shall such examination report be released to

the board of directors prior to its release to the public, but this shall not

preclude the commissioner from complying with subdivision (3) of this section.

The commissioner shall notify the board of directors when the examination is

completed. The request for an examination shall be kept on file by the

commissioner but it shall not be open to public inspection prior to the release

of the examination report to the public.

(3) It shall be

the duty of the commissioner to report to the board of directors when he or she

has reasonable cause to believe that any member insurer examined or being

examined at the request of the board of directors may be insolvent or in a

financial condition hazardous to the policyholders or the public.

(4) The board of

directors may, upon majority vote, make reports and recommendations to the

commissioner upon any matter germane to the solvency, liquidation,

rehabilitation or conservation of any member insurer. Such reports and

recommendations shall not be considered public documents.

(5) The board of

directors may, upon majority vote, make recommendations to the commissioner for

the detection and prevention of insurer insolvencies.

(6) The board of

directors shall, at the conclusion of any insurer insolvency in which the

association was obligated to pay covered claims, prepare a report on the

history and causes of such insolvency, based on the information available to

the association, and submit such report to the commissioner. (1969, No. 279

(Adj. Sess.), § 12.)