Insurers contemplating transactions regarding a transfer & assumption of insurance contracts wherein a novation of existing or in-force contracts is intended, must seek the prior approval of the Commissioner per 8 V.S.A. §8204(e-g) with reference to 8 V.S.A. §8204(h)(1-4) and have all of the related forms approved prior to use per 8 V.S.A. §8204(a), (h)(5) and/or §8207(d-e).
Certain transactions are excluded as reflected in 8 V.S.A. §8202(b) and §8207(b): mergers, liquidations or rehabilitations, guarantee association transactions, and troubled companies.
Transaction Approval Request (8 V.S.A. §8204(e-g))
A. Receipt of Request: All requests and the supporting documentation for the Commissioner’s approval of a transfer or assumption transaction will not be considered “forms filings” and shall be forwarded to the Company Licensing Section. An acknowledgment of receipt will be provided to the requesting organization.
B. Evaluation: The Director of Company Licensing will evaluate the request with reference to the criteria provided in the statute (8 V.S.A. §8204(h)(1-4)) and any other criteria that might be appropriate under the circumstances. The decision will be made within ten (10) days of receipt.
C. Decision Letter: The Director will send a letter to the requesting organization, with a copy to the appropriate Rates & Forms section describing the transaction and the decision (approval or denial). The letter will be sent within five (5) days of the decision. The letter will advise the involved companies of their need to receive approval from the appropriate Rates and Forms section.
Rates and Forms Approval Request (8 V.S.A. §8204(a), (h)(5) and/or §8207(d-e))
A. The transferring insurer shall provide the following proposed forms for review (8 V.S.A. §8207(a)):
1. Notice of transfer to policyholder;
2. Notice of transfer to insurer’s agent or broker;
3. Response Card;
4. Assumption Certificate;
5. Premium or other notice regarding policyholder rights associated with “Op-Out” option.
All forms must be approved prior to use.