Vermont § 7073 - Domiciliary liquidator’s proposal to distribute assets

§ 7073. Domiciliary liquidator’s proposal to distribute assets

• (a) Within 120 days of a final determination of insolvency of an insurer by a court of
  competent jurisdiction of this State, the liquidator shall make application to the
  court for approval of a proposal to disburse assets out of marshalled assets, from
  time to time as such assets become available, to a guaranty association or foreign
  guaranty association having obligations because of such insolvency. If the liquidator
  determines that there are insufficient assets to disburse, the application required
  by this section shall be considered satisfied by a filing by the liquidator stating
  the reasons for this determination. (b) A proposal under subsection (a) of this section shall at least include provisions
  for: (1) Reserving amounts for the payment of expenses of administration and the payment of
  claims of secured creditors, to the extent of the value of the security held, and
  claims falling within the priorities established in Classes 1 and 2 of section 7081 of this title. (2) Disbursement of the assets marshalled to date and subsequent disbursement of assets
  as they become available. (3) Equitable allocation of disbursements to each of the guaranty associations and foreign
  guaranty associations entitled to such disbursements. (4) Securing by the liquidator from each of the associations entitled to disbursements
  pursuant to this section of an agreement to return to the liquidator such assets,
  together with income earned on assets previously disbursed, as may be required to
  pay claims of secured creditors and claims falling within the priorities established
  in section 7081 of this title in accordance with such priorities. A bond shall not be required of any such association. (5) A full report to be made by each association to the liquidator accounting for all
  assets so disbursed to the association, all disbursements made from such assets, any
  interest earned by the association on such assets, and any other matter as the court
  may direct. (c) The liquidator’s proposal shall provide for disbursements to the associations in amounts
  estimated at least equal to the claim payments made or to be made thereby for which
  such associations could assert a claim against the liquidator and shall further provide
  that if the assets available for disbursement from time to time do not equal or exceed
  the amount of such claim payments made or to be made by the association, then disbursements
  shall be in the amount of available assets. (d) The liquidator’s proposal shall, with respect to an insolvent insurer writing life
  or health insurance or annuities, provide for disbursements of assets to any guaranty
  association or any foreign guaranty association covering life or health insurance
  or annuities or to any other entity or organization reinsuring, assuming, or guaranteeing
  policies or contracts of insurance under the acts creating such associations. (e) Notice of an application under this section shall be given to the association in and
  to the commissioners of insurance of each of the states. Notice shall be deemed to
  have been given when deposited in the U.S. certified mails, first-class postage prepaid,
  at least 30 days prior to submission of such application to the court. Action on the
  application may be taken by the court, provided the notice required by this subsection
  has been given and provided further that the liquidator’s proposal complies with the
  provisions of subdivisions (b)(1) and (b)(2) of this section. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2021, No. 105 (Adj. Sess.), § 258, eff. July 1, 2022.)