§ 4982 - Creation of Vermont joint underwriting associations - Vermont Statutes

§ 4982. Creation of Vermont joint underwriting associations

(a) The commissioner is hereby authorized, under the terms of this chapter, to establish one or more Vermont joint underwriting associations. The purpose of any such association shall be to provide insurance on a self-supporting basis without subsidy from its members. No such association formed pursuant to this chapter shall be formed for the purpose of providing coverage for pollution exposures.

(b) Each insurer authorized to write, and engaged in writing within this state, property and casualty insurance shall be a member of an association established under this chapter by the commissioner and shall remain a member as a condition of its authority to write such insurance within this state, except that the commissioner may exclude classes of insurers for administrative convenience or because it is not practicable to require them to participate.

(c) An association shall be a temporary, nonexclusive, nonprofit unincorporated association constituting a legal entity separate and distinct from its members. All funds and reserves of an association shall be separately held and invested.

(d) An association shall not commence or resume after suspension, any of its underwriting operations, until the commissioner, after due hearing and investigation determines, and the emergency board approves such determination, that a voluntary market of insurance does not exist and that a voluntary market assistance plan has failed to restore availability of the needed insurance coverages. Upon such determination, an association shall be authorized to engage in the underwriting of any specific line of insurance determined to be unavailable in the voluntary market. If, after an association commences its operation, the commissioner determines that insurance can be made available in the voluntary market, he or she shall suspend the operation of the association. The commissioner may re-establish the association's operations if he or she finds after due hearing and investigation that the insurance industry has failed to provide a voluntary market for the specific line of insurance underwritten through the association.

(e) An association shall, subject to the terms and conditions of this chapter, have power on behalf of its members to:

(1) issue, or to cause to be issued, policies of insurance to qualified applicants, including incidental coverages and subject to limits as specified in the plan of operation. Coverages under such policies may be made available as primary or excess protection;

(2) underwrite and otherwise service such policies of insurance and adjust and pay losses with respect thereto, or appoint service companies or associations to perform those functions;

(3) assume or cede 100 percent reinsurance or a lesser percentage on any policy underwritten by the association. (Added 1985, No. 265 (Adj. Sess.), § 4, eff. June 4, 1986.)