Vermont § 4986 - Deficits

§ 4986. Deficits

• (a) In the event an association suffers an underwriting deficit for any year, the board
  of directors shall so certify to the Commissioner. Such certification shall be subject
  to the review and approval of the Commissioner. As provided in the plan of operation,
  but in a term not to exceed one year, each policyholder shall pay to the association
  a premium contingency assessment that bears the same ratio to the amount of such deficit
  as his or her premium for such year for insurance written or reinsured by the association
  bore to the total premiums paid to the association for such year. The association
  may cancel any policy of any policyholder who fails to pay the premium contingency
  assessment and need not pay any future claims against that policyholder. Any deficit
  premium contingency assessment uncollectible against any policyholder shall not be
  assessed against any other policyholder or policyholders. (b) In no event shall a deficit incurred by an association be charged directly or indirectly
  to any insured other than a policyholder insured through an association. (c) An association shall amend the amount of its certification of deficit to the Commissioner
  as the values of its incurred losses become finalized, and the members of the association
  shall upon approval by the Commissioner amend their recoupment procedure accordingly.
  The board of directors of an association may require all members to contribute on
  a temporary basis to the financial requirements of the association prior to recoupment
  of any deficit in such proportion as shall be specified in the plan. (Added 1985, No. 265 (Adj. Sess.), § 4, eff. June 4, 1986.)