Vermont § 6038 - Delinquency of sponsored captive insurance companies

§ 6038. Delinquency of sponsored captive insurance companies

• (a) Except as otherwise provided in this section, the provisions of chapter 145 of this
  title shall apply in full to a sponsored captive insurance company and to each of
  its protected cells. (b) Upon any order of supervision, rehabilitation, or liquidation of a sponsored captive
  insurance company or any of its protected cells, the receiver shall manage the assets
  and liabilities of the sponsored captive insurance company or any of its protected
  cells pursuant to the provisions of this subchapter. (c) Notwithstanding the provisions of chapter 145 of this title to the contrary: (1) In connection with the conservation, rehabilitation, or liquidation of a sponsored
  captive insurance company or any of its protected cells, the assets and liabilities
  of a protected cell shall at all times be kept separate from, and shall not be commingled
  with, those of other protected cells and the sponsored captive insurance company. (2) The assets of a protected cell may not be used to pay any expenses or claims other
  than those attributable to such protected cell. (3) Unless the sponsor consents and the Commissioner has granted prior written approval,
  the assets of the sponsored captive insurance company’s general account shall not
  be used to pay any expenses or claims attributable solely to a protected cell or protected
  cells of the sponsored captive insurance company. In the event that the assets of
  the sponsored captive insurance company’s general account are used to pay expenses
  or claims attributable solely to a protected cell or protected cells of the sponsored
  captive insurance company, the sponsor is not required to contribute additional capital
  and surplus to the sponsored captive insurance company’s general account, notwithstanding
  the provisions of section 6004 of this title. (4) A sponsored captive insurance company’s capital and surplus shall at all times be
  available to pay any expenses of or claims against the sponsored captive insurance
  company. (d) Notwithstanding the provisions of chapter 145 of this title or any other provision
  of law to the contrary, and, in addition to the provisions of this section, in the
  event of an insolvency of a sponsored captive insurance company or any of its protected
  cells where the Commissioner determines that one or more protected cells remain solvent,
  the Commissioner may separate such cells from the sponsored captive insurance company
  and, on application of the sponsor, may allow for the conversion of such protected
  cells into one or more new or existing sponsored captive insurance companies, or one
  or more other captive insurance companies, pursuant to a plan or plans of operation
  approved by the Commissioner. (e) Notwithstanding the provisions of chapter 145 of this title or any other provision
  of law to the contrary, and in addition to the provisions of this section, in the
  event of an insolvency of one or more protected cells of a sponsored captive insurance
  company, the Commissioner may separate such cell or cells from the sponsored captive
  insurance company and may allow for the conversion of such protected cell or cells
  into one or more new or existing sponsored captive insurance companies, or one or
  more other captive insurance companies, pursuant to a plan or plans of operation approved
  by the Commissioner. (Added 2003, No. 55, § 9; amended 2009, No. 42, § 24, eff. May 27, 2009; 2015, No. 20, § 7, eff. May 7, 2015; 2021, No. 139 (Adj. Sess.), § 14, eff. May 27, 2022.)