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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

101

:
INSURANCE COMPANIES GENERALLY






Subchapter

013
:
HOLDING COMPANIES AND SUBSIDIARIES










 

§

3694. Recovery

(a) If an order

for liquidation or rehabilitation of a domestic insurer has been entered, the

receiver appointed under such order shall have a right to recover on behalf of

the insurer where the distribution or payment pursuant to subdivision (1) or

(2) of this subsection is made at any time during the one year preceding the

petition for liquidation, conservation or rehabilitation, as the case may be,

subject to the limitations of subsections (b), (c) and (d) of this section.:

(1) from any

parent corporation or holding company or person or affiliate who otherwise

controlled the insurer, the amount of distributions (other than distributions

of shares of the same class of stock) paid by the insurer on its capital stock;

or

(2) any payment

in the form of a bonus, termination settlement or extraordinary lump sum salary

adjustment made by the insurer or its subsidiaries to a director, officer or

employee,

(b) No such

distribution shall be recoverable if the parent or affiliate shows that when

paid such distribution was lawful and reasonable, and that the insurer did not

know and could not reasonably have known that such distribution might adversely

affect the ability of the insurer to fulfill its contractual obligations.

(c) Any person

who was a parent corporation or holding company or a person who otherwise

controlled the insurer or affiliate at the time such distributions were paid

shall be liable up to the amount of distributions or payments under subsection

(a) of this section received by such person. Any person who otherwise

controlled the insurer at the time such distributions were declared shall be

liable up to the amount of distributions he or she would have received if they

had been paid immediately. If two or more persons are liable with respect to

the same distributions, they shall be jointly and severally liable.

(d) The maximum

amount recoverable under this section shall be the amount needed in excess of

all other available assets of the impaired or insolvent insurer to pay the contractual

obligations of the impaired or insolvent insurer and to reimburse any guaranty

funds.

(e) To the

extent that any person liable under subsection (c) of this section is insolvent

or otherwise fails to pay claims due from it pursuant to such subsection, its

parent corporation or holding company or person who otherwise controlled it at

the time the distribution was paid, shall be jointly and severally liable for

any resulting deficiency in the amount recovered from the person liable under

subsection (c) of this section. (Added 1991, No. 101, § 17.)