The Vermont Statutes Online
Banking and Insurance
SUPERVISION, REHABILITATION, AND LIQUIDATION OF INSURERS
7065. Fraudulent transfers prior to petition
transfer made or suffered and every obligation incurred by an insurer within
one year prior to the filing of a successful petition for rehabilitation or
liquidation under this chapter is fraudulent as to then existing and future
creditors if made or incurred without fair consideration, or with actual intent
to hinder, delay, or defraud either existing or future creditors. A transfer
made or an obligation incurred by an insurer ordered to be rehabilitated or
liquidated under this chapter, which is fraudulent under this section, may be
avoided by the receiver, except as to a person who in good faith is a
purchaser, lienor, or obligee, for a present fair equivalent value, and except
that a purchaser, lienor, or obligee, who in good faith has given a
consideration less than fair for such transfer, lien, or obligation, may retain
the property, lien or obligation as security for repayment. The Court may, on
due notice, order any such transfer or obligation to be preserved for the
benefit of the estate, and in that event, the receiver shall succeed to and may
enforce the rights of the purchaser, lienor, or obligee.
transfer of property other than real property shall be deemed to be made or
suffered when it becomes so far perfected that no subsequent lien obtainable by
legal or equitable proceedings on a simple contract could become superior to
the rights of the transferee under subsection 7067(c) of this title.
(2) A transfer
of real property shall be deemed to be made or suffered when it becomes so far
perfected that no subsequent bona fide purchaser from the insurer could obtain
rights superior to the rights of the transferee.
(3) A transfer
which creates an equitable lien shall not be deemed to be perfected if there
are available means by which a legal lien could be created.
(4) Any transfer
not perfected prior to the filing of a petition for liquidation shall be deemed
to be made immediately before the filing of the successful petition.
(5) The provisions
of this subsection apply whether or not there are or were creditors who might
have obtained any liens or persons who might have become bona fide purchasers.
transaction of the insurer with a reinsurer shall be deemed fraudulent and may
be avoided by the receiver under subsection (a) of this section if:
transaction consists of the termination, adjustment, or settlement of a
reinsurance contract in which the reinsurer is released from any part of its
duty to pay the originally specified share of losses that had occurred prior to
the time of the transactions, unless the reinsurer gives a present fair
equivalent value for the release; and
(2) any part of
the transaction took place within one year prior to the date of filing of the
petition through which the receivership was commenced.
(d) 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. (Added 1991,
No. 45, § 2, eff. May 29, 1991.)