§ 3635. Insolvency of ceding company
(a) No credit shall be allowed, as an admitted asset or deduction from liability, to any ceding insurer for reinsurance, unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable under contract or contracts reinsured by the assuming insurer on the basis of the claims allowed against the ceding insurer in the insolvency proceedings, without diminution because of the insolvency of the ceding insurer, directly to the ceding insurer or to its domiciliary liquidator or receiver except: (1) where the contract specifically provides for payment to the insured or his or her assignee or other persons or entity named in the insured’s policy as a payee of such reinsurance in the event of the insolvency of the ceding insurer or (2) where the assuming insurer with the consent of the direct insured or insureds has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.
(b) The domiciliary liquidator or receiver of an insolvent ceding insurer shall give written notice of the pendency of a claim against such ceding insurer on the contract reinsured within a reasonable time after such claim is filed in the insolvency proceeding. During the pendency of such claim any assuming insurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defenses which it deems available to the ceding insurer, its liquidator or receiver. Such expense shall be chargeable, subject to court approval, against the insolvent ceding insurer as part of the expense of liquidation to the extent of a proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer. Where two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though such expense had been incurred by the ceding company. (Added 1985, No. 145 (Adj. Sess.), § 5.)
Structure Vermont Statutes
Title 8 - Banking and Insurance
Chapter 101 - Insurance Companies Generally
§ 3302. Plan of organization; incorporators
§ 3303. Mutual companies; directors, charter provisions as to
§ 3304. Capital and surplus requirements
§ 3306. Duties of Secretary of State, records
§ 3307. Consideration for stock
§ 3308. List of stockholders; certificate to transact business; liability of president and directors
§ 3308a. Reorganization formations
§ 3309. Mutual insurers to commence business; when
§ 3312. Construction with other laws
§ 3314. Annual financial statements; reports; filing fee
§ 3315. Coordinated regulation
§ 3316. Corporate governance; disclosure
§ 3361. Requirements for license
§ 3362. Authority to transact various kinds of insurance business
§ 3364. Authorization for investment purposes only
§ 3367. Retaliatory provisions
§ 3368. Transacting business without certificate of authority prohibited
§ 3368a. Unauthorized and misleading transactions
§ 3369. Commissioner may enjoin unauthorized insurer
§ 3370. Service of process upon unauthorized insurer by director
§ 3381. Legislative purpose and policy
§ 3382. Acts which constitute Secretary of State agent for service of process
§ 3383. Service upon the Secretary of State notice to defendant
§ 3384. Service upon other agents; notice to defendant
§ 3386. Effect on other modes of service
§ 3387. Prerequisites to defense of action
§ 3389. Motion to quash for improper service
§ 3421. Mutualization of stock insurer
§ 3422. Mutual insurers—Prohibitions
§ 3423. Converting mutual insurer or mutual insurance holding company
§ 3425. Procedure for consolidation
§ 3426. Effective date of merger or consolidation
§ 3428. Rights of dissenting shareholders
§ 3429. Rights of dissenting members or policyholders
§ 3430. Effect of merger or consolidation
§ 3431. Merger or consolidation between domestic and foreign insurers—Requirements
§ 3433. Certificates of fees and commissions paid
§ 3434. Fees—Penalty for receiving
§ 3437. Redomestication; approval as a domestic insurer
§ 3438. Redomestication; conversion to foreign insurer
§ 3439. Effects of redomestication
§ 3441. Formation of a mutual insurance holding company
§ 3443. Regulated as an insurance company
§ 3444. Demutualization of a mutual insurance holding company
§ 3445. Membership interest not a security
§ 3446. Filing of amended charters
§ 3461b. General limitations and diversification requirements for life and health insurers
§ 3461c. Rated credit investments
§ 3461d. Registration or filing exemption
§ 3462. Investments—Foreign insurers
§ 3463a. Valuation of investments
§ 3465. Exemption from investment limitations
§ 3467. Qualification of investments
§ 3468. Investments qualified under prior law
§ 3469. Loans to directors and officers—Restrictions
§ 3470. Mortgage loans to minors
§ 3471. Mortgages on real and personal property as liens; priorities
§ 3472. Earnings statements and income ratios—Special situations
§ 3501. Life insurance and annuities
§ 3502. Insurance—Other life insurance and annuities
§ 3503. Deposits of domestic insurer doing foreign business
§ 3541. Filing and approval of forms
§ 3542. Grounds for disapproval
§ 3543. Existing forms and filings
§ 3552. Fees assessed by the National Association of Insurance Commissioners
§ 3563. Examination of companies; fees
§ 3564. Examination of foreign insurers; expenses
§ 3565. Examination of officers and books
§ 3567. Liquor liability insurance records
§ 3568. Preservation of records
§ 3569. National Association of Insurance Commissioners filing requirements
§ 3572. Revocation of certificate of authority
§ 3573. Conduct of examinations
§ 3576. Immunity from liability
§ 3577. Requirements for actuarial opinions
§ 3578a. Annual financial reporting
§ 3581. Purpose; scope; intent
§ 3583. Risk management framework
§ 3587. Contents of ORSA summary report
§ 3611. Scope of subchapter; short title
§ 3613. Creation of Association
§ 3615. Powers and duties of Association
§ 3617. Powers and duties of Commissioner
§ 3619. Nonduplication of recovery
§ 3620. Prevention of insolvencies
§ 3621. Examination of Association
§ 3623. Recognition of assessments in rates
§ 3625. Stay of proceedings; reopening of default judgment
§ 3626. Prohibition against advertising of membership in Association
§ 3634a. Credit for reinsurance
§ 3635. Insolvency of ceding company
§ 3641. Claims, rights, title, and interests of nonresidents
§ 3642. Liability for payments to nonresidents
§ 3661. Cease and desist powers; prosecutions and penalties
§ 3662. Nonpayment of judgment; penalty
§ 3663. Minimum limitation on actions; void policy provisions
§ 3664. Forms; filing proof of loss and other documents, waiver of filing
§ 3665a. Timely payment of property and casualty insurance claims; interest
§ 3665b. Timely payment of life insurance claims and annuity death benefits; interest
§ 3666. Rules; methods of notice
§ 3671. Disclosure of information
§ 3673. Penalty for noncompliance
§ 3682. Subsidiaries of insurers
§ 3683. Acquisition of control of or merger with domestic insurer
§ 3683a. Acquisitions involving insurers not otherwise covered
§ 3684. Registration of insurers
§ 3685. Standards and management of an insurer within an insurance holding company system
§ 3687. Confidential treatment
§ 3689. Injunctions; prohibitions against voting securities; sequestration of voting securities
§ 3692. Revocation, suspension, or nonrenewal of insurer’s license
§ 3696. Groupwide supervisor; internationally active insurance group