Vermont § 3694 - Recovery

§ 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.)