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Vermont Statutes Title 8. Banking and Insurance, § 7069. Setoffs

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) Mutual debts or mutual credits whether arising out of one or more contracts between the insurer and another person in connection with any action or proceeding under this chapter shall be set off and the balance only shall be allowed or paid, except as provided in subsections (b) and (c) of this section and section 7072 of this title.

(b) No setoff or counterclaim shall be allowed in favor of any person where:

(1) the obligation of the insurer to the person would not at the date of the filing of a petition for liquidation entitle the person to share as a claimant in the assets of the insurer;

(2) the obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff;

(3) the obligation of the insurer is owed to an affiliate of such person, or any other entity or association other than the person;

(4) the obligation of the person is owed to an affiliate of the insurer, or any other entity or association other than the insurer;

(5) the obligation of the person is to pay an assessment levied against the members or subscribers of the insurer, or is to pay a balance upon a subscription to the capital stock of the insurer, or is in any other way in the nature of a capital contribution;

(6) the obligation of the person is to pay to the insurer sums held in a fiduciary capacity for the insurer; or

(7) the person alone or together with any other member of its insurance company holding system owns 50 percent or more of the voting stock of the insurer.

(c) The receiver shall provide persons with accounting statements identifying debts which are currently due and payable. Where a person owes to the insurer currently due and payable balances, against which the person asserts setoff of mutual credits which may become due and payable from the insurer in the future, the person shall promptly pay to the receiver the currently due and payable amount; provided that, notwithstanding section 7081 of this title, the receiver shall promptly and fully refund, to the extent of the person's prior payments, any mutual credits that become due and payable to the person by the insurer.

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Cite this article: FindLaw.com - Vermont Statutes Title 8. Banking and Insurance, § 7069. Setoffs - last updated January 01, 2024 | https://codes.findlaw.com/vt/title-8-banking-and-insurance/vt-st-tit-8-sect-7069/

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