Commissioner finds applicant has not fully met requirements for licensing

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Title 8 : Banking and Insurance

Chapter 131 : Licensing Requirements

Subchapter 001 : Producers
§ 4791. Definitions As used in this chapter: (1) “Surplus lines insurance broker” means an individual who solicits, negotiates, or procures a policy of insurance in an insurance company not licensed to transact business in this State that cannot be procured from insurers licensed to do business in this State. All transactions under the license shall be subject to the provisions of this title. Nothing contained in this chapter shall prevent a surplus lines insurance broker from assigning or transferring all or part of his or her commissions or compensation to any producer duly licensed under the provisions of this chapter. (2) “Consultant” means an individual, resident, or nonresident who, for a fee, holds himself or herself out to the public as engaged in the business of offering any advice, counsel, opinion, or service with respect to the benefits, advantages, or disadvantages promised under any policy of insurance that could be issued in this State. (3) “Adjuster” means any person who investigates claims or negotiates settlement of claims arising under policies of insurance in behalf of insurers under such policies, or who advertises or solicits business from insurers as an adjuster. Lawyers settling claims of clients shall not be considered an adjuster. A license as an adjuster shall not be required of an official or employee of a domestic fire or casualty insurance company or of a duly licensed resident insurance producer of a domestic or duly licensed foreign insurer who is authorized by such insurer to appraise losses under policies issued by such insurer. (4) “Public adjuster” means any person who investigates claims or negotiates settlement of claims arising under policies of insurance in behalf of the insured under such policies or who advertises or solicits business as such adjuster. Lawyers settling claims of clients shall not be deemed to be insurance public adjusters. (5) “Appraiser” means any person who, for compensation, appraises the loss or damage under policies of automobile insurance on the behalf of the insurers under such policies. A license as an appraiser will not be required of an official or employee of a domestic fire or casualty insurance company or of a duly licensed resident insurance producer of a domestic or duly admitted foreign insurer who is authorized by such insurer to appraise losses under policies issued by such insurer. A license will not be required of an automobile repair shop or repair facility which makes an appraisal at the request of the insured or insurer. (6) “Insurance producer” means a person required to be licensed under the laws of this State to sell, solicit, or negotiate insurance. (7) “Limited lines producer” means a person authorized by the Commissioner to sell, solicit, or negotiate limited lines insurance as defined in subchapter 1A of this chapter. (8) “Business entity” means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity. (9) “Business entity limited lines producer” means a business entity, as defined in subdivision (8) of this section, that is also a limited lines producer, as defined in subdivision (7) of this section. (Amended 1969, No. 175 (Adj. Sess.), § 4, eff. March 5, 1970; 1973, No. 217 (Adj. Sess.), § 1; 1981, No. 210 (Adj. Sess.), § 1; 1993, No. 30, § 16, eff. May 21, 1993; 2001, No. 97 (Adj. Sess.), § 3; 2015, No. 149 (Adj. Sess.), § 30; 2019, No. 57, § 20.)
§ 4792. Repealed. 2001, No. 97 (Adj. Sess.), § 20.
§ 4793. General license requirements (a) No person, partnership, association, or corporation shall act as or hold himself or herself out to be an insurance producer, surplus lines insurance broker, managing general agent, reinsurance intermediary, limited lines producer, consultant, insurance adjuster, or insurance appraiser unless duly licensed. (b) No insurance producer, surplus lines insurance broker, or limited lines producer shall make application for, procure, negotiate for, or place for others, any lines of insurance as to which he or she is not then qualified and duly licensed. (c) No person shall investigate or negotiate settlement of any claim arising under 21 V.S.A. chapters 9 and 11 unless the person is licensed as a workers’ compensation adjuster under this subchapter. (Amended 1969, No. 175 (Adj. Sess.), § 5, eff. March 5, 1970; 1973, No. 217 (Adj. Sess.), § 3; 1991, No. 249 (Adj. Sess.), § 19; 1993, No. 225 (Adj. Sess.), § 24; 2001, No. 97 (Adj. Sess.), § 4.)
§ 4794. Repealed. 2001, No. 97 (Adj. Sess.), § 20.
§ 4795. Controlled business (a) The Commissioner shall not grant, renew, continue, or permit to continue any license except for life insurance if he or she finds that the license is being or will be used by the applicant or licensee for the purpose of writing controlled business. Controlled business means: (1) insurance written on the interests of the licensee or those of his or her immediate family or of his or her employer; or (2) insurance covering himself or herself or members of his or her immediate family or a corporation, association, or partnership, or the officers, directors, substantial stockholders, partners, employees of the corporation, association, or partnership, of which he or she or a member of his or her immediate family is an officer, director, substantial stockholder, partner, associate, or employee; provided, however, that nothing in this subdivision shall apply to insurance written in connection with credit transactions. (b) The license shall be deemed to have been, or intended to be, used for the purpose of writing controlled business, if the Commissioner finds that during any 12-month period the aggregate commissions earned from the controlled business has exceeded 25 percent of the aggregate commission earned on all business written by the applicant or licensee during the same period. (Amended 1969, No. 175 (Adj. Sess.), § 6, eff. March 5, 1970; 1973, No. 217 (Adj. Sess.), § 5.)
§ 4796. Commissions; payment; acceptance (a) An insurance company, insurance producer, limited lines, or surplus lines broker shall not pay a commission, service fee, brokerage, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in this State if that person is required to be licensed under this chapter and is not so licensed. (b) A person shall not accept a commission, service fee, brokerage, or other valuable consideration for selling, soliciting, or negotiating insurance in this State if that person is required to be licensed under this chapter and is not so licensed. (c) Renewal or other deferred commissions may be paid to a person for selling, soliciting, or negotiating insurance in this State if that person was required to be licensed under this chapter at the time of the sale, solicitation, or negotiation and was so licensed at the time. (d) An insurer, insurance producer, or limited lines producer may pay or assign commissions, service fees, brokerages, or other valuable consideration to an insurance agency or to persons who do not sell, solicit, or negotiate insurance in this State, unless the payment would violate subdivision 4724(8) of this title. (e) A person licensed under this chapter shall not accept a commission, service fee, brokerage, or other valuable consideration for selling, soliciting, negotiating, or otherwise orchestrating the sale, enrollment, membership, or other connection between a Vermont resident and any arrangement involving the sharing of health-related expenses that is not insurance as defined in section 3301a of this title. (Amended 1973, No. 217 (Adj. Sess.), § 6; 2001, No. 97 (Adj. Sess.), § 5; 2019, No. 63, § 8, eff. June 17, 2019.)
§ 4797. License contents The license shall state the name, address, date of issue, the renewal or expiration date, the line or lines of insurance covered by the license, and such other information as the Commissioner deems proper for inclusion. (Amended 1967, No. 39, § 1; 1971, No. 14, § 1, eff. March 11, 1971; 1973, No. 217 (Adj. Sess.), § 7; 1975, No. 78, § 3; 2001, No. 97 (Adj. Sess.), § 6.)
§ 4798. Term of license (a) Except as provided by subsections (b) and (d) of this section, all licenses issued pursuant to this subchapter shall continue in force not longer than 24 months. (b)(1) All licenses of insurance producers and limited lines producers issued pursuant to this subchapter shall expire as of 12:01 a.m. o’clock on the first day of April of the odd-numbered year next following date of issuance; and (2) all other license types issued pursuant to this subchapter shall expire as of 12:01 a.m. o’clock on the first day of April of the even-numbered year following the date of issuance; unless (3) the licensee prior to the expiration of the license has filed with the Commissioner, on forms prescribed and furnished by the Commissioner, a request for renewal of such license for an ensuing 24-month period. Such request must be accompanied by payment of the renewal fee as provided in subdivision 4800(2) of this title. (c) In order to spread continuation of insurance producer and limited lines producer appointment renewals with reasonable uniformity throughout the calendar year, the Commissioner may fix a date, “insurer’s anniversary,” upon which all such renewals of persons licensed under this chapter who have been appointed by that insurer shall be subject to renewal as to that particular insurer. (d) Producer appointments shall expire as of 12:01 a.m. on the first day of June following the date of issuance. Annually, before the expiration of producer appointments, the Commissioner shall provide each insurer with an alphabetical appointment renewal list of the names for all of its producers in the State. Each insurer shall return the list and identify the producer appointments to be renewed in a manner and time specified by the Commissioner. Payment of the annual producer appointment renewal fee, as specified in section 4800 of this title, shall be made in a manner and time specified by the Commissioner. (Added 1969, No. 175 (Adj Sess.), § 8, eff. March 5, 1970; amended 1973, No. 217 (Adj. Sess.), § 8; 1985, No. 236 (Adj. Sess.), § 2, eff. June 3, 1986; 1999, No. 87 (Adj. Sess.), § 1; 2001, No. 97 (Adj. Sess.), § 7; 2019, No. 70, § 2, eff. June 1, 2021; 2019, No. 131 (Adj. Sess.), § 6; 2021, No. 105 (Adj. Sess.), § 226, eff. July 1, 2022.)
§ 4799. Repealed. 2001, No. 97 (Adj. Sess.), § 20.
§ 4800. License requirements The Commissioner shall not issue, continue, or permit to continue any license of an insurance producer, surplus lines insurance broker, managing general agent, reinsurance intermediary, insurance consultant, limited lines producer, business entity limited lines producer, insurance adjuster, public adjuster, and appraiser except in compliance with the following: (1) Application shall be made to the Commissioner by the applicant on a form prescribed by the Commissioner. (2)(A) All license applications shall be accompanied by a $30.00 fee plus the applicable fees as follows: (i) Initial licensing and biennial renewal licensing fee for insurance producers and limited lines producers, $30.00. (ii) Initial licensing and biennial renewal licensing fee for a business entity limited lines producer, $150.00. (iii) Except as provided in subdivisions (I) and (II) of this subdivision, initial and annual producer appointment fees for each qualification set forth in section 4813g of subchapter 1A of this chapter for resident and nonresident producers acting as agents of foreign insurers, $60.00: (I) the Commissioner may charge one fee for a qualification in “property and casualty” insurance; and (II) the Commissioner may charge one fee for a qualification in “life and accident and health or sickness” insurance. (iv) Initial 24-month appointment and biennial renewal appointment fee for limited lines producers, $90.00. (v) Initial 24-month license and biennial renewal fee for resident and nonresident adjusters, and appraisers licenses, $120.00, and public adjusters, $200.00. (vi) The initial 24-month license fee and biennial renewal fee for surplus lines brokers, $400.00. (vii) The initial 24-month license fee and biennial renewal fee for consultants, $200.00. (viii) The initial 24-month license fee and biennial renewal fee for reinsurance intermediaries, $200.00. (ix) The initial 24-month license fee and biennial renewal fee for managing general agents, $300.00. (B) An appointment or license shall terminate upon failure to pay the prescribed fees. (3) The Commissioner shall issue an insurance producer’s license, an insurance consultant’s license, a limited lines producer’s license, adjuster’s license, public adjuster’s license, and appraiser’s license to any duly qualified resident or nonresident of the State as follows: (A) An applicant may qualify as a resident if the applicant resides in this State or maintains the applicant’s principal place of business in this State. Any license issued pursuant to any application claiming residency for licensing purposes, as defined in this section, in this State shall constitute an election of residency in this State and shall be void if the licensee, while holding a resident license in this State, also holds or makes application for a license in, or thereafter claims to be a resident of any other state or other jurisdiction, or ceased to be a resident of this State. (B)(i) An applicant may qualify for a license under this chapter as a nonresident only if the applicant holds a like license in the United States or a province of Canada. A license issued to a nonresident of this State shall grant the same rights and privileges afforded a resident licensee, except as provided in subdivision (3)(B)(v) of this section. (ii) An application for a license by a nonresident applicant shall constitute designation by the applicant of the Commissioner and the Commissioner’s successors in office, to be the applicant’s true and lawful attorney, upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of any interested person arising out of the applicant’s insurance business in this State. The designation shall constitute an agreement that the service of process is of the same legal force and validity as personal service of process in this State upon that person. The service of process upon any licensee in any action or proceeding in any court of competent jurisdiction of this State may be made by serving the Commissioner with appropriate copies thereof and the payment to the Commissioner of a fee of $25.00. The Commissioner shall forward a copy of the process by registered or certified mail to the licensee at the licensee’s last known address of record or principal place of business, and shall keep a record of all process so served upon the licensee. (iii) Service of process upon any licensee in any action or proceeding instituted by the Commissioner under this subdivision shall be made by the Commissioner by mailing the process by registered or certified mail to the licensee at the licensee’s last known address of record or principal place of business. If the Commissioner revokes or suspends any nonresident’s license through a formal proceeding under this chapter, the Commissioner shall promptly notify the appropriate commissioner of the licensee’s residence of the action and of the particulars thereof. (iv) A nonresident of this State may be licensed at the discretion of the Commissioner without taking an otherwise required written examination if the applicant has passed a comparable written examination, or has been a continuous holder prior to the time the written examination was required, of a license like the license being applied for in this State. This subdivision does not apply to insurance producers and limited lines producers exempt from examination pursuant to section 4813i of this chapter. (v) Whenever, by the laws or regulations of any other state or jurisdiction, fees are imposed upon residents of this State who are nonresident applicants or licensees of another state or jurisdiction in addition to, or in excess of, those imposed on nonresidents under this subchapter, the same fees shall be imposed upon the residents of the other state or jurisdiction. (C) An applicant for any license under this chapter must be deemed by the Commissioner to be competent, trustworthy, financially responsible, and of good personal and business reputation. (D)(i) Except as provided in section 4813i of this title or subdivision (3)(B)(iv) of this section, the Commissioner shall subject each applicant for license as an insurance producer, surplus lines insurance broker, consultant, limited lines producer, adjuster, public adjuster, or appraiser to a written examination or series of written examinations as to the applicant’s competence to act as a licensee, which the applicant must personally take and pass to the satisfaction of the Commissioner. An applicant must submit an application to the Commissioner within 24 months after the date of examination. (ii) The Commissioner may issue interim licenses not to be valid for more than 24 months or such lesser time as the Commissioner may deem appropriate for such lines of insurance as the Commissioner may deem appropriate. The qualifications, requirements, and fees for an interim license will be the same as for a regular license in the same line except that the written examination testing professional competence shall be of a lesser degree of difficulty than the written examination for a regular license. An interim license will not be renewable once it has expired. (iii) At the discretion of the Commissioner, an applicant for a license may be a business entity; however, this subdivision shall not affect the requirement of any natural person to be licensed as required under this chapter. (iv) Each examination or series of examinations for a license shall be approved for use by the Commissioner and shall reasonably test the applicant’s knowledge as to the lines of insurance, policies, and transactions to be handled under the license applied for, of the duties and responsibilities of a licensee, and of the pertinent insurance laws of this State. (v) Examination for licensing shall be at such reasonable times and places as are designated by the Commissioner. (vi) The Commissioner or the Commissioner’s designee shall give, conduct, and grade all examinations in a fair and impartial manner and without discrimination as between individuals examined. (vii) The applicant must pass the examination or series of examinations with a grade determined by the Commissioner to indicate satisfactory knowledge and understanding of the line or lines of insurance for which the applicant seeks qualification. A fee shall be charged for each examination or series of examinations for which the applicant sits. If examinations are administered by the Commissioner’s designee pursuant to subdivision (3)(D)(vi) of this section, the fee charged may be payable to the designee, notwithstanding 32 V.S.A. § 502(a). Formal evidence of the licensing shall be issued by the Commissioner to the licensee within a reasonable time. (E)(i) If the Commissioner finds that the applicant has not fully met the requirements for licensing, the Commissioner shall refuse to issue the license and promptly notify the applicant and the appointing insurer, in writing, of the denial, stating the grounds therefor. (ii) If a license is refused, the Commissioner shall refund the license fee tendered with the license application. All other fees accompanying the application for license as insurance producer, surplus lines insurance broker, consultant, and limited lines producer, adjuster, public adjuster, and appraiser shall not be refundable. (F) Every licensee shall notify the Commissioner of any change in the licensee’s residential or business address within 30 days after the change. (4) In order to assist in the performance of the Commissioner’s duties under this chapter, the Commissioner may: (A) contract with nongovernmental entities, including the National Association of Insurance Commissioners (NAIC) or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees, and the collection of system charges related to producer licensing or to any other activities that require a license under this chapter that the Commissioner and the nongovernmental entity may deem appropriate; (B) participate, in whole or in part, with the NAIC, or any affiliates or subsidiaries the NAIC oversees, in a centralized producer license registry to effect the licensure and appointment of producers and other persons required to be licensed under this chapter; (C) adopt by rule any uniform standards and procedures as are necessary to participate in a centralized registry. Such rules may include the central collection of all fees and system charges for license or appointments that are processed through the registry, and the establishment of uniform license and appointment renewal dates; (D) require persons engaged in activities that require a license under this chapter to make any filings with the Department in a digital, electronic manner approved by the Commissioner for applications, renewal, amendments, notifications, reporting, appointments, terminations, the payment of fees and system charges, and such other activities relating to licensure under this chapter as the Commissioner may require, subject to such hardship circumstances demonstrated by the applicant or licensee that the Commissioner deems appropriate for the utilization of the central registry in a nondigital and nonelectronic manner; and (E)(i) authorize the centralized producer license registry, or other third party approved by the Commissioner, to collect fingerprints on behalf of the Commissioner in order to receive or conduct criminal history background checks; (ii) use the centralized producer license registry, or other third party approved by the Commissioner, as a channeling agent for requesting information from and distributing information to the U.S. Department of Justice or any governmental agency, in order to reduce the points of contact that the Federal Bureau of Investigation (FBI) or the Commissioner may have to maintain for purposes of this subsection; and (iii) require persons engaged in activities that require a license under this chapter to submit fingerprints, and the Commissioner may utilize the services of the centralized producer license registry, or other third party approved by the Commissioner, to process the fingerprints and to submit the fingerprints to the FBI, the Vermont State Police, or any equivalent State or federal law enforcement agency for the purpose of conducting a criminal history background check. The licensee or applicant shall pay the cost of such criminal history background check, including any charges imposed by the centralized producer licensing system, or other third party approved by the Commissioner, as applicable. (Amended 1973, No. 217 (Adj. Sess.), § 10; 1979, No. 44, §§ 1-5; 1979, No. 197 (Adj. Sess.), § 14; 1981, No. 42, § 2; 1981, No. 210 (Adj. Sess.), § 3; 1983, No. 66, §§ 1, 2; 1985, No. 236 (Adj. Sess.), § 3, eff. June 3, 1986; 1991, No. 166 (Adj. Sess.), § 13; 1991, No. 249 (Adj. Sess.), §§ 20-22; 1997, No. 59, § 68, eff. June 30, 1997; 1999, No. 87 (Adj. Sess.), § 2; 2001, No. 97 (Adj. Sess.), § 8; 2009, No. 137 (Adj. Sess.), § 8; 2011, No. 21, § 13; 2015, No. 149 (Adj. Sess.), § 31; 2019, No. 70, § 3; 2019, No. 70, § 3a, eff. June 1, 2021; 2021, No. 105 (Adj. Sess.), § 227, eff. July 1, 2022.)
§ 4800a. Continuing education (a) An applicant for an insurance producer license renewal shall demonstrate satisfactory completion of 24 hours of continuing education during the preceding two years. (b) The Commissioner shall adopt such rules as are needed to carry out the purposes of this section. Such rules shall include: (1) a process for the formation and operation of an advisory council of insurance professionals and consumers to advise the Commissioner on matters relating to continuing education; (2) a process for the approval of courses; (3) a process for the approval of course providers; (4) standards for courses; and (5) procedures for documenting satisfactory completion of courses. (c) For good cause shown, the Commissioner may extend for no longer than six months the period of time for completion of the educational requirements of this section. (d) This section shall not apply to a nonresident insurance producer who resides in a state or district that has a continuing education requirement and who has satisfied such requirement and submits adequate documentation of continuing education completion to the Commissioner. (e) The license of an applicant who has failed to satisfy the continuing education requirements of this section, and who has not been granted an extension of time as set forth in subsection (c) of this section, shall not be renewed. (f) The Commissioner shall suspend the license of any applicant who, after receiving an extension of time as set forth in subsection (c) of this section, has not satisfactorily completed the continuing education requirement. (g) The Commissioner may contract with an outside vendor to administer continuing education requirements, including approval of courses and course providers; collection and maintenance of insurance producer record-keeping; and compliance monitoring. The costs of an outside vendor shall be borne by applicants for insurance producer license renewal and by course providers through fees imposed by the outside vendor. All fees charged by the outside vendor will be subject to the prior approval of the Commissioner and may be payable to the outside vendor, notwithstanding 32 V.S.A. § 502(a). (h) [Repealed.] (Added 1999, No. 87 (Adj. Sess.), § 3; amended 2001, No. 97 (Adj. Sess.), §§ 9, 20.)
§ 4801. Repealed. 2001, No. 97 (Adj. Sess.), § 20.
§ 4802. Consultants (a) An individual shall not engage in the business of an insurance consultant until being issued a consultant license by the Commissioner; provided, however, that a consultant license shall not be required of the following: (1) attorneys licensed to practice law in this State acting in their professional capacity; (2) a duly licensed insurance producer or surplus lines insurance broker; (3) a trust officer of a bank acting in the normal course of his or her employment; or (4) an actuary or a certified public accountant who provides information, recommendations, advice, or services in his or her professional capacity. (b) An application for a license to act as an insurance consultant shall be made to the Commissioner on forms prescribed by the Commissioner. Within a reasonable time after receipt of a properly completed application form, the Commissioner shall hold a written examination for the applicant and may conduct investigations and propound interrogatories concerning the applicant’s qualifications, residence, business affiliations, and any other matter that he or she deems necessary or advisable to determine compliance with this chapter or for the protection of the public. (c) In advance of rendering any service as a consultant, a written agreement on a form approved by the Commissioner shall be prepared by the consultant and shall be signed by both the consultant and the client. The agreement shall outline the nature of the work to be performed by the consultant and shall state his or her fee for the work. The consultant shall retain a copy of the agreement for not less than two years after completion of the services. The copy shall be available to the Commissioner. (d) No person may concurrently hold a consultant’s license and an insurance producer’s, surplus lines insurance broker’s, or limited lines producer’s license in any line. (e) No licensed consultant may employ, be employed by, or be in partnership with nor receive any remuneration whatsoever, from any licensed insurance producer, surplus lines insurance broker, limited lines producer, or insurer arising out of his or her activities as a consultant. (f) The license shall be valid for not longer than 24 months and may be renewed biennially and extended in the same manner as an insurance producer’s license. (g) All requirements and standards relating to the denial, revocation, or suspension of an insurance producer’s license, including penalties, shall apply to the denial, revocation, and suspension of an insurance consultant’s license as nearly as practicable. (h) A consultant is obligated under his or her license to serve with objectivity and complete loyalty the interests of his or her client alone; and to render his or her client such information, counsel, and service as within the knowledge, understanding, and opinion, in good faith of the licensee, best serves the client’s insurance needs and interests. (i) Prior to the issuance of a license to an insurance consultant, the applicant shall file with the Commissioner, and thereafter for as long as the license remains in effect, shall keep in force a bond in the penal sum of not less than $5,000.00 with an authorized corporate surety approved by the Commissioner. The aggregate liability of the surety for any and all claims on any bond shall in no event exceed the penal sum thereof. No bond shall be terminated unless at least 60 days’ prior written notice thereof is given by the surety to the licensee and the Commissioner. Upon termination of the license for which the bond was in effect, the Commissioner shall notify the surety within 10 working days. All surety protection under this subsection is to inure to the benefit of the aggrieved parties. (Amended 1973, No. 217 (Adj. Sess.), § 12; 1975, No. 78, § 2; 2001, No. 97 (Adj. Sess.), § 10; 2021, No. 105 (Adj. Sess.), § 228, eff. July 1, 2022.)
§ 4803. Adjusters, workers’ compensation adjusters, public adjusters and appraisers, qualifications, and requirements (a) Qualifications. For the protection of the people of this State, the Commissioner shall not issue, continue, or permit to exist any license as an adjuster, a workers’ compensation adjuster, public adjuster, or appraiser except as follows: (1) must be at least 18 years of age; (2) must be competent, trustworthy, financially responsible, and of good personal business reputation; (3) must pass any written examination required for the license under this subchapter. This subsection shall not apply to multiperil crop insurance adjusters certified in accordance with subsection (f) of this section; and (4) must have at least two years’ experience or special training with respect to handling of loss claims, in the case of workers’ compensation adjusters, workers’ compensation claims, or in the case of appraisers, insurance loss appraising of sufficient duration and scope reasonably to make the applicant competent to fulfill the responsibilities of an adjuster, workers’ compensation adjuster, public adjuster, or appraiser; or, in lieu of such experience or training, is to be employed by and subject to the immediate personal supervision of a licensed adjuster, workers’ compensation adjuster, public adjuster, or appraiser in this State who has been so established in business for not less than three years preceding the date of application for the license. This subsection shall not apply to persons holding existing licenses as adjuster, and public adjusters in this State immediately prior to July 1, 1974. This section shall apply to any person applying for a workers’ compensation adjuster’s license or an appraiser’s license. (5) [Repealed.] (b) [Repealed.] (c) Records. (1) Each adjuster, workers’ compensation adjuster, public adjuster, or appraiser shall keep at the address shown on the license a record of all transactions under the license. (2) The record shall include: (A) A copy of all investigations, adjustments, or appraisals undertaken or consummated. (B) A statement of any fee, commission, or other compensation received or to be received by the adjuster, workers’ compensation adjuster, public adjuster, or appraiser on account of such investigation, adjustment, or appraisal. (3) The adjuster, workers’ compensation adjuster, public adjuster, or appraiser shall make such records available for examination by the Commissioner at all times, and shall retain the records for at least three years. (d) Nonresident adjusters, workers’ compensation adjusters, public adjusters, or appraisers; process; special catastrophe losses. (1) Subdivision 4800(3)(B)(ii) of this title (service of process) shall also apply as to nonresidents of this State licensed as adjuster, workers’ compensation adjuster, public adjuster, or appraiser by this State. (2) No adjuster, public adjuster, or appraiser license is required as to any adjuster, public adjuster, or appraiser sent into this State on behalf of a duly admitted insurer for the investigation or adjustment of a particularly unusual or extraordinary loss, or of a series of losses resulting from a catastrophe common to all such losses. Nor shall such a license be required of a marine-average adjuster. (e) The Commissioner shall require workers’ compensation adjusters to complete educational or training programs in their field. The Commissioner may suspend or revoke a license issued under this subchapter of any person who fails to comply with the educational or training requirements established by the Commissioner. (f) The Commissioner may require a multiperil crop insurance adjuster to be certified as having passed a proficiency examination approved by the federal Risk Management Agency as a condition of obtaining an adjuster’s license or license renewal under this chapter, or another proficiency examination approved by the Commissioner. Upon request of the Commissioner, a multiperil crop insurance adjuster licensee shall furnish to the Commissioner proof of such certification satisfactory to the Commissioner. (Amended 1973, No. 217 (Adj. Sess.), § 13; 1975, No. 78, §§ 1, 4; 1993, No. 225 (Adj. Sess.), § 25; 2001, No. 97 (Adj. Sess.), § 11; 2009, No. 137 (Adj. Sess.), §§ 10, 11.)
§ 4804. License denial; nonrenewal; or termination causes (a) The Commissioner may suspend, revoke, or refuse to continue or renew any license issued under this chapter if, after notice to the licensee and to the insurer represented, and opportunity for hearing, he or she finds as to the licensee any one or more of the following conditions: (1) Providing incorrect, misleading, incomplete, or materially untrue information in the license application; (2) Any cause for which issuance of the license could have been refused had it then existed and been known to the Commissioner at the time of issuance; (3) Violation of, or noncompliance with, any insurance laws, or for violation of any lawful rule, regulation, subpoena, or order of the Commissioner or of a commissioner of another state; (4) Obtaining or attempting to obtain any license through misrepresentation or fraud; (5) Improperly withholding, misappropriating, or converting to his or her own use any monies belonging to policyholders, insurers, beneficiaries or others received in the course of his or her insurance business; (6) Misrepresentation of the terms of any actual or proposed insurance contract; (7) Conviction of a felony or misdemeanor involving moral turpitude; (8) The licensee has committed any unfair trade practice or fraud as defined in this title. It shall be an unfair practice under this section for a licensee to: (A)(i) Sell, solicit, or negotiate the purchase of health insurance in this State through an advertisement that makes use directly or indirectly of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance, and that contact will be made by an insurance agent or insurance company. (ii) Use an appointment that was made to discuss Medicare products or to solicit the sale of Medicare products to solicit sales of any other insurance products unless the consumer requests the solicitation, and the products to be discussed are clearly identified to the consumer in writing at least 48 hours in advance of the appointment. (iii) Solicit the sale of Medicare products door-to-door prior to receiving an invitation from a consumer. (B) As used in this subdivision, the term “Medicare products” includes Medicare Part A, Medicare Part B, Medicare Part C, Medicare Part D, and Medicare supplement plans; (9) In the conduct of his or her affairs, the licensee has used fraudulent, coercive, or dishonest practices or has shown himself or herself to be incompetent, untrustworthy, or financially irresponsible; (10) His or her license has been suspended or revoked in any other state, province, district, or territory; (11) The licensee has forged another’s name to an application for insurance or to any document related to an insurance transaction; (12) The applicant has been found to have been cheating on an examination for an insurance license; (13) Knowingly accepting insurance business from a person who is not licensed; (14) Failing to comply with an administrative or court order imposing a child support obligation; or (15) Failing to pay State income tax or comply with any administrative or court order directing payment of State income tax. (b) The license of a business entity may be suspended, revoked, or refused if the Commissioner finds, after notice and opportunity for a hearing, that an individual licensee’s violation was known or should have been known by one or more of the partners, officers, directors, or managers acting on behalf of the business entity, and the violation was neither reported to the Commissioner nor corrective action taken. (c) In the event that the action by the Commissioner is to not renew or to deny an application for a license, he or she shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reasons for the denial or nonrenewal of the applicant’s or licensee’s license. The applicant or licensee may make written demand upon the Commissioner within a reasonable time for a hearing before the Commissioner to determine the reasonableness of the Commissioner’s action. The hearing shall be held within 30 days from the date of receipt of the written demand by the applicant and shall be held pursuant to 3 V.S.A. chapter 25. (d) In addition to or in lieu of any applicable denial, suspension, or revocation of a license, any person violating this subchapter may, after hearing, be subject to an administrative penalty of not less than $500.00 nor more than $2,500.00. (Amended 1973, No. 217 (Adj. Sess.), § 14; 1995, No. 167 (Adj. Sess.), § 20; 2001, No. 97 (Adj. Sess.), § 12; 2007, No. 80, § 22.)
§ 4805. Hearings All hearings held pursuant to this subchapter shall be governed by the provisions of 3 V.S.A. chapter 25. (Amended 1973, No. 217 (Adj. Sess.), § 15.)
§ 4806. Suspension, revocation, or termination of license (a) The Commissioner shall promptly notify all appointing insurers, where applicable, and the licensee regarding any suspension, revocation, or termination of license by the Commissioner. (b) Upon suspension, revocation, or termination of the license of a resident of this State, the Commissioner shall notify the central office of the National Association of Insurance Commissioners and the commissioner of each state for whom the licensee has executed a certificate as provided for in accordance with subdivision 4800(3) of this title. (c)-(e) [Repealed.] (Added 1963, No. 178, § 1, eff. June 27, 1963; amended 1973, No. 217 (Adj. Sess.), § 16; 2001, No. 97 (Adj. Sess.), § 13; 2021, No. 25, § 9, eff. May 12, 2021.)
§ 4807. Surplus lines insurance broker (a) Every surplus lines insurance broker who solicits an application for insurance of any kind, in any controversy between the insured or his or her beneficiary and the insurer issuing any policy upon such application, shall be regarded as representing the insured and his or her beneficiary and not the insurer; except any insurer that directly or through its agents delivers in this State to any surplus lines insurance broker a policy or contract for insurance pursuant to the application or request of the surplus lines insurance broker, acting for an insured other than himself or herself, shall be deemed to have authorized the surplus lines insurance broker to receive on its behalf payment of any premium that is due on the policy or contract for insurance at the time of its issuance or delivery. (b) [Repealed.] (c) Notwithstanding any other provision of this title, a person licensed as a surplus lines insurance broker in his or her home state shall receive a nonresident surplus lines insurance broker license pursuant to section 4800 of this chapter. (d) Not later than July 1, 2012, the Commissioner shall participate in the national insurance producer database of the NAIC, or any other equivalent uniform national database, for the licensure of surplus lines brokers and the renewal of such licenses. (Added 1973, No. 217 (Adj. Sess.), § 17; amended 1981, No. 210 (Adj. Sess.), § 2; 2001, No. 97 (Adj. Sess.), § 14; 2009, No. 137 (Adj. Sess.), § 9a; 2011, No. 49, § 12, eff. May 26, 2011.)
§ 4808. Representative of fraternal benefit societies Representatives of fraternal benefit societies who sell, solicit, and negotiate insurance contracts shall be deemed insurance producers and subject to the same licensing requirements as insurance producers. (Added 1973, No. 217 (Adj. Sess.), § 18; amended 2001, No. 97 (Adj. Sess.), § 15.)
§ 4809. Countersignature Notwithstanding any other provisions of the statutes of this State, there shall be no requirement that an insurance producer who is a resident of this State must countersign a policy of insurance written by a foreign insurance company. (Added 1973, No. 217 (Adj. Sess.), § 19; amended 2001, No. 97 (Adj. Sess.), § 16.)
§§ 4810, 4811. Repealed. 2001, No. 97 (Adj. Sess.), § 20.
§ 4812. Rules and regulations The Commissioner may adopt reasonable rules and regulations for the implementation and administration of the provisions of this chapter. (Added 1973, No. 217 (Adj. Sess.), § 22; amended 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 180 (Adj. Sess.), § 38; 2001, No. 97 (Adj. Sess.), § 17; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2021, No. 105 (Adj. Sess.), § 229, eff. July 1, 2022.)

Subchapter 001A : Producer Licensing Requirements
§ 4813. Purpose and scope This subchapter governs the qualifications and procedures for the licensing of insurance producers. It simplifies and organizes some statutory language to improve efficiency, permits the use of new technology, and reduces costs associated with issuing and renewing insurance licenses. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813a. Definitions As used in this subchapter: (1) “Business entity” shall have the same meaning as in subdivision 4791(8) of this title. (2) “Home state” means the District of Columbia and any state or territory of the United States in which an insurance producer maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance producer. (3) “Insurance producer” shall have the same meaning as in subdivision 4791(6) of this title. (4) “Insurer” means any person engaged in the business of insurance in this State. It shall include any individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance. The term includes entities formed or regulated under chapters 101, 103, 105, 107, 109, 111, 113, 121, 123, 125, 132, 137, 138, and 139 of this title. As used in this subchapter, “insurer” does not include entities formed under chapter 141 or 142 of this title. (5) “License” means a document issued by the Commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent, or inherent, in the holder to represent or commit an insurer. (6) “Limited lines insurance” means travel accident or travel baggage insurance, or any other line of insurance that the Commissioner deems necessary to recognize for the purposes of complying with subsection 4813h(d) of this subchapter, or any other line of insurance the Commissioner, by regulation, shall deem essential for the transaction of business in this State and that does not require the professional competency demanded for an insurance producer’s license. (7) “Limited lines producer” shall have the same meaning as in subdivision 4791(7) of this title. (8) “Negotiate” means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract, provided the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers. (9) “Person” means an individual or a business entity. (10) “Portable electronics insurance” shall have the same meaning as in subdivision 4257(2) of this title. (11) “Portable electronics vendor” shall have the same meaning as in subdivision 4257(3) of this title. (12) “Sell” means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurer. (13) “Solicit” means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular insurer. (14) “Terminate” means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer’s authority to transact insurance. (15) “Uniform Application” means the current version of the NAIC Uniform Application for resident and nonresident producer licensing. (16) “Uniform Business Entity Application” means the current version of the NAIC Uniform Business Entity Application for resident and nonresident business entities. (Added 2001, No. 97 (Adj. Sess.), § 18; amended 2005, No. 36, § 8, eff. June 1, 2005; 2011, No. 136 (Adj. Sess.), § 10, eff. May 18, 2012; 2015, No. 149 (Adj. Sess.), § 32.)
§ 4813b. License required A person shall not sell, solicit, or negotiate insurance in this State for any class or classes of insurance unless the person is licensed for that line of authority in accordance with this subchapter. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813c. Duties (a) A person not duly licensed as an insurance producer or limited lines producer who sells, solicits, or negotiates insurance policies on behalf of an insurer shall be deemed a producer acting as the agent of such insurer within the intent of this subchapter, and shall be liable for all the duties, requirements, liabilities, and penalties to which an insurance producer or limited lines producer is subject, and the insurer, by compensating the person through any of its officers, agents, or employees for soliciting policies of insurance, shall accept and acknowledge that person as its agent in such a transaction. (b) A person not licensed as an insurance producer or limited lines producer who sells, solicits, or negotiates insurance on behalf of others or transmits for others an application for a policy of insurance to or from an insurer, or offers or assumes to act in the negotiations of insurance, shall be a producer within the intent of this subchapter, and shall be liable for all the duties, requirements, liabilities, and penalties to which licensed insurance producers or limited lines producers are subject. (c) Every insurance producer or limited lines producer acting as an agent of an insurer who sells, solicits, or negotiates insurance of any kind shall, in any controversy between the insured or his or her beneficiary and the insurer, be regarded as representing the insurer and not the insured or his or her beneficiary for whose acts the insurer will be responsible. (d) Every insurance producer or limited lines producer, not acting as the agent of an insurer, who sells, solicits, or negotiates insurance of any kind shall, in any controversy between the insured and his or her beneficiary and the insurer issuing any policy of insurance, be regarded as representing the insured or his or her beneficiary and not the insurer, except any insurer that directly or through its agents delivers in this State to any producer a policy or contract for insurance pursuant to the application or request of the producer, acting for an insured other than himself or herself, shall be deemed to have authorized the producer to receive on its behalf payment of any premium that is due on the policy, or contract for insurance at the time of its issuance or delivery. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813d. Exceptions to licensing (a) Nothing in this subchapter shall be construed to require an insurer to obtain an insurance producer license. In this section, the term “insurer” does not include an insurer’s officers, directors, employees, subsidiaries, or affiliates. (b) A license as an insurance producer shall not be required of the following: (1) An officer, director, or employee of an insurer or of an insurance producer, provided the officer, director, or employee does not receive any commission on policies written or sold to insure risks residing, located, or to be performed in this State; and: (A) the officer, director, or employee’s activities are executive, administrative, managerial, clerical, or a combination of these, and are only indirectly related to the sale, solicitation, or negotiation of insurance; or (B) the officer, director, or employee’s function relates to underwriting, loss control, inspection, or the processing, adjusting, investigating, or settling of a claim on a contract of insurance; or (C) The officer, director, or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person’s activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation, or negotiation of insurance; (2) A person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group, or blanket accident and health insurance; or for the purpose of enrolling individuals under plans; issuing certificates under plans, or otherwise assisting in administering plans; or performs administrative services related to mass-marketed property and casualty insurance; where no commission is paid to the person for the service; (3) An employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, directors, or trustees are engaged in the administration or operation of a program of employee benefits for the employer’s or association’s own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees, or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts; (4) Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating, or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation, or negotiation of insurance; (5) A person whose activities in this State are limited to advertising without the intent to solicit insurance in this State through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the State, provided the person does not sell, solicit, or negotiate insurance that would insure risks residing, located, or to be performed in this State; (6) A person who is not a resident of this State who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, provided that person is otherwise licensed as an insurance producer to sell, solicit, or negotiate that insurance in the State where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; or (7) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer, provided the employee does not sell or solicit insurance or receive a commission. (8) A person selling or offering portable electronics insurance who is an employee or authorized representative of a portable electronics vendor licensed as a limited lines insurance producer to sell, solicit, or negotiate portable electronics insurance in accordance with rules adopted by the Commissioner pursuant to section 4261 of this title. (Added 2001, No. 97 (Adj. Sess.), § 18; amended 2011, No. 136 (Adj. Sess.), § 11, eff. May 18, 2012.)
§ 4813e. Application for examination A resident individual applying for an insurance producer license shall pass a written examination as set forth in subdivision 4800(3)(E) of this title unless exempt pursuant to section 4813i of this subchapter. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813f. Application for license (a) An individual applying for a resident insurance producer license shall make application to the Commissioner on the Uniform Application and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individual’s knowledge and belief. Before approving the application, the Commissioner shall find that the individual: (1) is at least 18 years of age; (2) has not committed any act that is a ground for denial, suspension, or revocation set forth in section 4804 of this title; (3) is competent, trustworthy, financially responsible, and of good personal and business reputation; (4) has paid the fees set forth in section 4800 of this title; and (5) has successfully passed the examinations for the lines of authority for which the person has applied. (b) As soon as practicable, but no later than April 1, 2003, the Commissioner shall permit a business entity to be licensed as an insurance producer. Application shall be made using the Uniform Business Entity Application. Except as permitted by regulation, licensure of a business entity shall not relieve any natural person who sells, solicits, or negotiates insurance of the requirement to be licensed under this chapter. Before approving the application, the Commissioner shall find that: (1) The business entity has paid the fees set forth in section 4800 of this title. (2) The business entity has designated a licensed producer who is a natural person responsible for the business entity’s compliance with the insurance laws, rules, and regulations of this State. (c) The Commissioner may require any documents reasonably necessary to verify the information contained in an application. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813g. License (a) An insurance producer may receive qualification for a license and an appointment in one or more of the following lines of authority: (1) Life: insurance coverage on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income. (2) Accident and health or sickness: insurance coverage for sickness, bodily injury, or accidental death, and may include benefits for disability income. (3) Property: insurance coverage for the direct or consequential loss or damage to property of every kind. (4) Casualty: insurance coverage against legal liability, including that for death, injury, or disability or damage to real or personal property. (5) Variable life and variable annuity products: insurance coverage provided under variable life insurance contracts and variable annuities. (6) Personal lines: property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes. (7) Any other line of insurance permitted under State laws or regulations. (b) An insurance producer license shall remain in effect unless revoked or suspended as long as the fee set forth in section 4800 of this title is paid and education requirements for resident individual producers are met by the due date. (c) A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance (for example, including a long-term medical disability) may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures. (d) [Repealed.] (Added 2001, No. 97 (Adj. Sess.), § 18; amended 2009, No. 137 (Adj. Sess.), § 9.)
§ 4813h. Nonresident licensing (a) Unless denied licensure pursuant to section 4804 of this title, a nonresident person shall receive a nonresident producer license if: (1) the person is currently licensed as a resident and in good standing in his or her home state; (2) the person has submitted the proper request for licensure and has paid the fees required by section 4800 of this title; (3) the person has submitted or transmitted to the Commissioner the application for licensure that the person submitted to his or her home state, or in lieu of the same, a completed Uniform Application; and (4) the person’s home state awards nonresident producer licenses to residents of this State on the same basis. (b) The Commissioner may verify the producer’s licensing status through the producer database maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries. (c) A nonresident producer who moves from one state to another state or a resident producer who moves from this State to another state shall file a change of address and provide certification from the new resident state within 30 days of the change of legal residence. No fee or license application is required. (d) Notwithstanding any other provision of this chapter, the Commissioner may allow a person licensed as a limited lines producer in his or her home state to receive a nonresident limited lines producer license, pursuant to subsection (a) of this section, granting the same scope of authority as granted under the license issued by the producer’s home state. For the purposes of this section, limited lines insurance is any authority granted by the home state that restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to subdivisions 4813g(a)(1) through (6) of this subchapter. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813i. Exemption from examination (a) An individual who applies for an insurance producer license in this State who was previously licensed for the same lines of authority in another state shall not be required to complete any prelicensing education or examination. This exemption is only available if the person is currently licensed in that state or if the application is received within 90 days of the cancellation of the applicant’s previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state’s producer database records, maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested. (b) A person licensed as an insurance producer in another state who moves to this State shall make application within 90 days of establishing legal residence to become a resident licensee pursuant to section 4813f of this subchapter. No prelicensing education or examination shall be required of that person to obtain any line of authority previously held in the prior state except where the Commissioner determines otherwise by regulation. (c) A person who applies for a limited lines travel insurance producer license under chapter 148 of this title shall not be required to be examined by the Commissioner. (d), (e) [Repealed.] (f) At the discretion of the Commissioner, a limited lines producer may be exempt from examination. (Added 2001, No. 97 (Adj. Sess.), § 18; amended 2009, No. 137 (Adj. Sess.), § 12; 2021, No. 139 (Adj. Sess.), § 11, eff. August 25, 2022.)
§ 4813j. Assumed names An insurance producer doing business under any name other than the producer’s legal name is required to notify the Commissioner prior to using the assumed name. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813k. Temporary licensing (a) The Commissioner may issue a temporary insurance producer license for a period not to exceed 180 days without requiring an examination if the Commissioner deems that the temporary license is necessary for the servicing of an insurance business in the following cases: (1) to the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer’s business; (2) to a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or license; (3) to the designee of a licensed insurance producer entering active service in the Armed Forces of the United States of America; or (4) in any other circumstance where the Commissioner deems that the public interest will best be served by the issuance of this license. (b) The Commissioner may, by order, limit the authority of any temporary licensee in any way deemed necessary to protect insureds and the public. The Commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The Commissioner may, by order, revoke a temporary license if the interest of insureds or the public is endangered. A temporary license may not continue after the owner or the personal representative disposes of the business. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813l. Appointments (a) An insurance producer or limited lines producer shall not act as an agent of an insurer unless the producer becomes an appointed agent of that insurer. A producer who is not acting as an agent of an insurer is not required to become appointed. (b) An appointment shall be made by an insurer designating an insurance producer or limited lines producer as an agent of the insurer for the lines of insurance the producer will be authorized to sell, solicit, or negotiate for the insurer. (c) As set forth in section 4813g of this subchapter, an insurer shall make a separate appointment for each line of insurance for which an insurance producer or limited lines producer will be acting as an agent of the insurer. (d) To appoint a producer as its agent, the appointing insurer shall file, in a format approved by the Commissioner, a notice of appointment within 15 days from the date the agency contract is executed or the first insurance application is submitted, whichever is sooner. (e) An insurer shall pay an appointment fee, in the amount and method of payment set forth in section 4800 of this title, for each insurance producer appointed by the insurer and for each line of insurance in which a producer is qualified. (f) An insurer shall remit, in a manner prescribed by the Commissioner, a renewal appointment fee in the amount set forth in section 4800 of this title. (g) As soon as practicable, the Commissioner shall permit an insurer to appoint a producer to all or some insurers within the insurer’s holding company system or group by the filing of a single appointment request. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813m. Notification to Commissioner of termination (a) Termination for cause. An insurer or authorized representative of the insurer that terminates the appointment, employment, contract, or other insurance business relationship with a producer shall notify the Commissioner within 30 days following the effective date of the termination, using a format prescribed by the Commissioner, if the reason for termination is one of the reasons set forth in section 4804 of this title or the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities in section 4804 of this title. Upon the written request of the Commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination or activity of the producer. (b) Termination without cause. An insurer or authorized representative of the insurer that terminates the appointment, employment, or contract with a producer for any reason not set forth in section 4804 of this title shall notify the Commissioner within 30 days following the effective date of the termination, using a format prescribed by the Commissioner. Upon written request of the Commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination. (c) Ongoing notification requirement. The insurer or the authorized representative of the insurer shall promptly notify the Commissioner in a format acceptable to the Commissioner if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the Commissioner in accordance with subsection (a) of this section had the insurer then known of its existence. (d) Copy of notification to be provided to producer. (1) Within 15 days after making the notification required by subsections (a), (b), and (c) of this section, the insurer shall mail a copy of the notification to the producer at his or her last known address. If the producer is terminated for cause for any of the reasons listed in section 4804 of this title, the insurer shall provide a copy of the notification to the producer at his or her last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier. (2) Within 30 days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the Commissioner. The producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the Commissioner’s file and accompany every copy of a report distributed or disclosed for any reason about the producer as permitted under subsection (f) of this section. (e) Immunities. (1) In the absence of actual malice, an insurer, the authorized representative of the insurer, a producer, the Commissioner, or an organization of which the Commissioner is a member and that compiles the information and makes it available to other commissioners or regulatory or law enforcement agencies shall not be subject to civil liability, and a civil cause of action of any nature shall not arise against these entities or their respective agents or employees, as a result of any statement or information required by or provided pursuant to this section or any information relating to any statement that may be requested in writing by the Commissioner from an insurer or producer, or a statement by a terminating insurer or producer to an insurer or producer limited solely and exclusively to whether a termination for cause under subsection (a) of this section was reported to the Commissioner, provided the propriety of any termination for cause under subsection (a) of this section is certified in writing by an officer or authorized representative of the insurer or producer terminating the relationship. (2) In any action brought against a person that may have immunity under subdivision (1) of this subsection for making any statement required by this section or providing any information relating to any statement that may be requested by the Commissioner, the party bringing the action shall plead specifically in any allegation that subdivision (1) of this subsection does not apply because the person making the statement or providing the information did so with actual malice. (3) Subdivision (1) or (2) of this subsection shall not abrogate or modify any existing statutory or common law privileges or immunities. (f) Confidentiality. (1) Any documents, materials, or other information in the control or possession of the Department of Financial Regulation that is furnished by an insurer, producer, or an employee or agent thereof acting on behalf of the insurer or producer, or obtained by the Commissioner in an investigation pursuant to this section shall be confidential by law and privileged, shall not be subject to 1 V.S.A. chapter 5, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner’s duties. (2) Neither the Commissioner nor any person who received documents, materials, or other information while acting under the authority of the Commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subdivision (1) of this subsection. (3) In order to assist in the performance of the Commissioner’s duties under this chapter, the Commissioner may: (A) share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subdivision (1) of this subsection, with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners, its affiliates or subsidiaries, and with state, federal, and international law enforcement authorities, provided the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information; (B) receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners, its affiliates or subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and (C) enter into agreements governing sharing and use of information consistent with this subsection. (4) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in subdivision (3) of this subsection. (5) Nothing in this act shall prohibit the Commissioner from releasing final, adjudicated actions, including for cause terminations that are open to public inspection pursuant to 1 V.S.A. chapter 5 to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries. (g) Penalties for failing to report. An insurer, the authorized representative of the insurer, or producer that fails to report as required under the provisions of this section or that is found to have reported with actual malice by a court of competent jurisdiction may, after notice and hearing, have its license or certificate of authority suspended or revoked and may be assessed an administrative penalty of $10,000.00. (Added 2001, No. 97 (Adj. Sess.), § 18; amended 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)
§ 4813n. Reciprocity (a) The Commissioner shall waive any requirements for a nonresident license applicant with a valid license from his or her home state, except the requirements imposed by section 4813g of this chapter, if the applicant’s home state awards nonresident licenses to residents of this State on the same basis. (b) A nonresident producer’s satisfaction of his or her home state’s continuing education requirements for licensed insurance producers shall constitute satisfaction of this State’s continuing education requirements if the nonresident producer’s home state recognizes the satisfaction of its continuing education requirements imposed upon producers from this State on the same basis. (Added 2001, No. 97 (Adj. Sess.), § 18.)
§ 4813o. Reporting of actions (a) A producer shall report to the Commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in this state within 30 days of the final disposition of the matter. This report shall include a copy of the order, consent to order, or other relevant legal documents. (b) Within 30 days of the initial pretrial hearing date, a producer shall report to the Commissioner any criminal prosecution of the producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents. (Added 2001, No. 97 (Adj. Sess.), § 18.)

Subchapter 002 : Regulation of Managing General Agents, Reinsurance Intermediaries, and Producer-Controlled Insurers
§ 4815. Definitions As used in this subchapter: (1) “Actuary” shall have the same meaning as in section 3577 of this title. (2) “Accredited state” means a state in which the insurance department or regulatory agency has qualified as meeting the minimum financial regulatory standards promulgated and established from time to time by the National Association of Insurance Commissioners. (3) “Control” or “controlled” shall have the same meaning as in chapter 101, subchapter 13 of this title. (4) “Controlled insurer” means a licensed insurer that is controlled, directly or indirectly, by a producer. (5) “Controlling producer” means a producer who, directly or indirectly, controls an insurer. (6) “Licensed insurer” or “insurer” means any person, firm, association, or corporation duly licensed to transact an insurance business in this State. The following are not licensed insurers for the purposes of this subchapter: (A) all residual market pools and joint underwriting authorities or associations; and (B) all captive insurers as defined in chapter 141 of this title, except risk retention groups. (7)(A) “Managing general agent” means any person who: (i) manages all or part of the insurance business of an insurer and acts as an agent for such insurer, and, who, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross written premium greater than or equal to five percent of the policyholder surplus of the insurer in any one quarter or year; and (ii) engages in one or more of the following activities on the business produced: (I) adjusts or pays claims in excess of $10,000.00; or (II) negotiates reinsurance on behalf of the insurer. (B) Notwithstanding the provisions of subdivision (A) of this subdivision (7), the following persons shall not be considered as managing general agents for the purposes of this chapter: (i) an employee of the insurer; (ii) a U.S. manager of the U.S. branch of an alien insurer; (iii) an underwriting manager who, pursuant to contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, subject to the holding company regulatory act, and whose compensation is not based on the volume of premiums written, or if based on the volume of premiums written, is also based on the insurer earning a profit on the business written by such underwriting manager; and (iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange under powers of attorney. (8) “Producer” means an agent, broker, or reinsurance intermediary licensed pursuant to subchapter 1 of this chapter. (9) “Reinsurance intermediary” means a reinsurance intermediary-broker or a reinsurance intermediary-manager as defined in subdivisions (10) and (11) of this section. (10) “Reinsurance intermediary-broker” means any person, other than an officer or employee of the ceding insurer, who solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of such insurer. (11)(A) “Reinsurance intermediary-manager” means any person who has authority to bind or manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department, or underwriting office, and acts as an agent for such reinsurer whether known as a reinsurance intermediary-manager, manager, or other similar term. (B) Notwithstanding the provisions of subdivision (A) of this subdivision (11), the following persons shall not be considered a reinsurance intermediary-manager, with respect to such reinsurer, for the purposes of this subchapter: (i) an employee of the reinsurer; (ii) a U.S. manager of the U.S. branch of an alien reinsurer; (iii) an underwriting manager who, pursuant to contract, manages all the reinsurance operations of the reinsurer, is under common control with the reinsurer, and whose compensation is not based on the volume of premiums written; and (iv) the manager of a group, association, pool, or organization of insurers that engage in joint underwriting or joint reinsurance and who are subject to examination by the insurance commissioner of the state in which the manager’s principal business office is located. (12) “Reinsurer” means any person, firm, association, or corporation duly licensed in this State pursuant to the applicable provisions of the insurance law as an insurer with the authority to assume reinsurance. (13) “Underwrite” means the authority to accept or reject risk on behalf of the insurer. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993; amended 2013, No. 103 (Adj. Sess.), § 2, eff. April 14, 2014.)
§ 4816. Applicability of subchapter to controlling producers (a) The provisions of this subchapter shall apply to a controlling producer if, in any calendar year, the aggregate amount of gross written premium on business placed with a controlled insurer is greater than or equal to five percent of the admitted assets of the controlled insurer, as reported in the controlled insurer’s quarterly statement filed as of September 30 of the prior year. (b) The provisions of this subchapter shall not apply if the controlling producer: (1) places insurance only with the controlled insurer, or only with the controlled insurer and a member or members of the controlled insurer’s holding company system, or the controlled insurer’s parent, affiliate, or subsidiary and receives no compensation based upon the amount of premiums written in connection with such insurance; (2) accepts insurance placements only from nonaffiliated subproducers, and not directly from insureds; and (3) the controlled insurer, except for insurance business written through a residual market facility such as The Vermont Automobile Insurance Plan, accepts insurance business only from a controlling producer, a producer controlled by the controlled insurer, or a producer that is a subsidiary of the controlled insurer. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)
§ 4817. Licensure (a) No person shall act in the capacity of a managing general agent with respect to risks located in this State for an insurer licensed in this State unless such person is licensed as a managing general agent in this State and is a licensed producer in this State as defined in this subchapter. (b) No person shall act in the capacity of a managing general agent representing an insurer domiciled in this State with respect to risks located outside this State unless such person is a licensed producer in this State (such license may be a nonresident license) pursuant to this chapter. (c) The Commissioner may require a bond in an amount acceptable to him or her for the protection of the insurer or reinsurer. (d) The Commissioner may require a managing general agent or reinsurance intermediary to maintain an errors and omissions policy. (e) No person shall act as a reinsurance intermediary-broker in this State unless such reinsurance intermediary-broker is licensed as a resident or nonresident reinsurance intermediary and as an insurance broker in this State as defined in this chapter. (f) No person shall act as a reinsurance intermediary-manager: (1) for a reinsurer domiciled in this State, unless such reinsurance intermediary-manager is a producer in this State; (2) in this State, if the reinsurance intermediary-manager maintains an office either directly or as a member or employee of a firm or association, or an officer, director, or employee of a corporation in this State, unless such reinsurance intermediary-manager is a producer in this State; and (3) in another state for a nondomestic insurer on any Vermont business, unless such reinsurance intermediary-manager is a licensed producer in this State or another state having a law substantially similar to this law or such person is licensed in this State as a nonresident reinsurance intermediary. (g) The Commissioner shall issue a reinsurance intermediary license to any person who has complied with the requirements of this subchapter unless the applicant, anyone named on the application, or any member, principal, officer, or director of the applicant, is not trustworthy, or that any controlling person of such applicant is not trustworthy to act as a reinsurance intermediary, or that any of the foregoing persons has given cause for revocation or suspension of such license, or has failed to comply with any prerequisite for the issuance of such license. (h) If the applicant for a reinsurance intermediary license is a nonresident, such applicant, as a condition precedent to receiving or holding a license, shall designate the Secretary of State as agent for service of process in the manner, and with the same legal effect, provided for by section 3370 of this title for designation of service of process upon unauthorized insurers; and also shall furnish the Secretary of State with the name and address of a resident of this State upon whom notices or orders of the Commissioner or process affecting such nonresident reinsurance intermediary may be served. Such licensee shall promptly notify the Secretary of State in writing of every change in its designated agent for service of process, and such change shall not become effective until acknowledged by the Secretary of State. (i) Licensed attorneys at law of this State when acting in their professional capacity as such shall be exempt from this section. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)
§ 4818. Contract required (a) No person shall transact business with a managing general agent, a reinsurance intermediary-manager, or a controlling producer as qualified by section 4816 of this title unless there is in force a written contract between the parties that sets forth the respective responsibilities of each party and, where both parties share responsibility for a particular function, specifies the division of such responsibilities. The contract must be approved by the board of directors of a reinsurer represented by a reinsurance intermediary-manager or the board of directors of a controlled insurer. At least 30 days before such reinsurer assumes or cedes business through such manager, or reinsurance intermediary, a true copy of the approved contract shall be filed with the Commissioner for approval. (b) The contract required under subsection (a) of this section shall contain the following minimum provisions: (1) The contract may be terminated by the insurer or reinsurer for cause upon written notice. (2) The authority to write business, underwrite, assume, or cede business, or settle claims may be suspended by the insurer or reinsurer during the pendency of any dispute regarding the cause for termination. (3) All funds due under the contract shall be remitted not less than monthly together with an accounting; however, the due date shall be fixed so that premiums or installments thereof collected shall be remitted not later than 90 days after the effective date of any policy for which the funds are collected. (4) All funds collected for an insurer or reinsurer under the contract shall be held in a fiduciary capacity in a financial institution approved by the Commissioner; however, funds of a controlling producer not required to be licensed in this State shall be maintained in compliance with the requirements of the controlling producer’s domiciliary jurisdiction. (5) Separate records of all business written under the contract shall be maintained. The contracting insurer or reinsurer shall have access to and the right to copy all accounts and records related to its business in a form usable by the insurer or reinsurer. (6) The contract may not be assigned in whole or in part. (7) The required use of underwriting, rating, or reinsurance underwriting standards formulated by the insurer or reinsurer when underwriting or reinsurance underwriting authority is transferred to a party to the contract. (8) The required use of a claims handling or settlement procedure formulated by the insurer or reinsurer when claims handling or settlement authority is transferred to a party to the contract. (9) The insurer shall have the right to cancel or nonrenew any policy of insurance subject to any applicable laws and regulations. (10) The required use of written standards established by the insurer for the cession or retrocession of all risks when ceding or retroceding authority is transferred to a party to the contract. (11) The managing general agent, reinsurance intermediary-manager, or controlling producer shall not bind or cede reinsurance on behalf of the insurer, reinsurer, or controlled insurer, except for facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract contains reinsurance underwriting guidelines for reinsurance ceded and assumed. The guidelines must list the reinsurers with which such automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules. (c) Transactions between a reinsurance intermediary broker and the insurer it represents in such capacity shall only be entered into pursuant to a written authorization specifying the responsibilities of each party. The authorization shall, at a minimum, provide that: (1) The insurer may terminate the reinsurance intermediary broker’s authority at any time. (2) The reinsurance intermediary broker will render accounts to the insurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by or owing to the reinsurance intermediary broker, and remit all funds due to the insurer within 30 days of receipt. (3) All funds collected for the insurer’s account will be held by the reinsurance intermediary broker in a fiduciary capacity in a financial institution approved by the Commissioner. (4) The reinsurance intermediary broker will comply with subsection 4821(c) of this title. (5) The reinsurance intermediary broker will comply with the written standards established by the insurer for the cession or retrocession of all risks. (6) The reinsurance intermediary broker will disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993; amended 1993, No. 12, § 8, eff. April 26, 1993; 2005, No. 122 (Adj. Sess.), § 1; 2021, No. 105 (Adj. Sess.), § 230, eff. July 1, 2022.)
§ 4819. Duties of insurers and reinsurers (a) Insurers utilizing managing general agents. (1) An insurer shall have on file an independent financial examination, in a form acceptable to the Commissioner, of each managing general agent with which it has done business. (2) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. The requirements of this subdivision are in addition to any other required loss reserve certification. (3) At least semiannually an insurer shall conduct an on-site review of the underwriting and claims processing operations of the managing general agent. (4) Binding authority for all reinsurance contracts other than those permitted in this chapter or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent. (5) Within 30 days of entering into or termination of a contract with a managing general agent, the insurer shall provide written notification of such appointment or termination to the Commissioner. Notices of appointment of a managing general agent shall include a statement of duties that the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the Commissioner may request. (6) An insurer shall review its books and records each quarter to determine if any producer as defined by this chapter has become a managing general agent as defined in this chapter. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the Commissioner of such determination and the insurer and producer must fully comply with the provisions of this subchapter within 30 days. (7) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer, or controlling shareholder of any of its managing general agents, unless the appointment is permitted by the applicable sections of chapter 101, subchapter 13 of this title concerning insurance holding companies or, if applicable, the sections of this chapter concerning business transacted with broker controlled property casualty insurers. (b) Insurers utilizing the services of a reinsurance intermediary-broker. (1) An insurer shall not engage the services of any person to act as a reinsurance intermediary-broker on its behalf unless such person is licensed as required by this chapter. (2) An insurer may not employ an individual who is employed by a reinsurance intermediary-broker with which it transacts business, unless such reinsurance intermediary-broker is under common control with the insurer and subject to chapter 101, subchapter 13 of this title. (3) The insurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-broker with which it transacts business. (c) Reinsurers utilizing the services of a reinsurance intermediary-manager. (1) A reinsurer shall not engage the services of any person to act as a reinsurance intermediary-manager on its behalf unless such person is licensed as required by this chapter. (2) The reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-manager that such reinsurer has engaged prepared by an independent certified accountant in a form acceptable to the Commissioner. (3) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance intermediary-manager. This opinion shall be in addition to any other required loss reserve certification. (4) Binding authority for all retrocessional contracts or participation in reinsurance syndicates shall rest with an officer of the reinsurer who shall not be affiliated with the reinsurance intermediary-manager. (5) Within 30 days of termination of a contract with a reinsurance intermediary-manager, the reinsurer shall provide written notification of such termination to the Commissioner. (6) A reinsurer shall not appoint to its board of directors, any officer, director, employee, controlling shareholder, or subproducer of its reinsurance intermediary-manager. This subsection shall not apply to relationships governed by chapter 101, subchapter 13 of this title. (7) At least semiannually, a reinsurer shall conduct an on-site review of the underwriting and claims processing operations of the reinsurance intermediary-manager. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)
§ 4820. Examination authority (a) The acts of the managing general agent are considered to be the acts of the insurer on whose behalf it is acting. A managing general agent may be examined as if it were the insurer. (b) A reinsurance intermediary shall be subject to examination by the Commissioner. The Commissioner shall have reasonable access to all books, bank accounts, and records of the reinsurance intermediary in a form usable to the Commissioner. (c) A reinsurance intermediary-manager may be examined as if it were the reinsurer. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)
§ 4821. Maintenance of books and records (a) General requirement. All claim files will be the joint property of the insurer or reinsurer and the contracting party. However, upon an order of liquidation of the insurer or reinsurer, such files shall become the sole property of the insurer, reinsurer, or its estate; both parties shall have reasonable access to and the right to copy the files on a timely basis. (b) Managing general agents. Managing general agents shall maintain separate records of business written. The insurer shall have access and right to copy all accounts and records related to its business in a form usable by the insurer and the Commissioner shall have access to all books, bank accounts, and records of the managing general agent in a form usable to the Commissioner. Such records shall be retained according to section 3568 of this title. (c) Reinsurance intermediary-brokers and managers. For at least ten years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-broker or manager, the reinsurance intermediary will keep a complete record for each transaction showing: (1) the type of contract, limits, underwriting restrictions, classes, or risks and territory; (2) period of coverage, including effective and expiration dates, cancellation provisions, notice required of cancellation, and, in the case of reinsurance intermediary-managers, the disposition of outstanding reserves on covered risks; (3) reporting and settlement requirements of balances; (4) rate used to compute the reinsurance premium; (5) names and addresses of assuming reinsurers; (6) rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary; (7) related correspondence and memoranda; (8) proof of placement; (9) details regarding retrocessions handled by the reinsurance intermediary, including the identity of retrocessionaires and percentage of each contract assumed or ceded; (10) financial records, including premium and loss accounts; (11) when the reinsurance intermediary procures or places a reinsurance contract on behalf of a licensed ceding insurer: (A) directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or (B) if placed through a representative of the assuming reinsurer, other than an employee, written evidence that such reinsurer has delegated binding authority to the representative; and (12) the insurer will have reasonable access and the right to copy and audit all accounts and records maintained by the reinsurance intermediary related to its business in a form usable by the insurer. (d) Broker controlled property casualty companies. The controlling broker shall maintain separately identifiable records of business written for the controlled insurer. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)
§ 4822. Sanctions If the Commissioner determines, after notice and hearing, that any person has violated any provision of this subchapter, the Commissioner may: (1) for each separate violation, impose a penalty up to $25,000.00; (2) revoke or suspend the person’s license; (3) order the managing general agent, reinsurance intermediary, or controlling producer to reimburse the insurer or reinsurer, or the rehabilitator or liquidator of the insurer or reinsurer for any losses incurred that are caused by a violation of this subchapter; and (4) order the controlling producer to cease placing business with the controlled insurer. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)
§ 4823. Other requirements of managing general agents and reinsurance intermediaries (a) Managing general agents and reinsurance intermediaries shall not: (1) commit the insurer or reinsurer to participate in insurance or reinsurance syndicates; (2) appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which he or she is appointed; (3) pay or commit the insurer to pay a claim, net of reinsurance or retrocessions, that exceeds one percent of the insurer’s or reinsurer’s policyholders’ surplus as of December 31 of the last completed calendar year without prior approval of the insurer or reinsurer; (4) collect any payment from a reinsurer or retrocessionaire or commit the insurer or reinsurer to any claim settlement with a reinsurer or retrocessionaire without prior approval of the insurer or reinsurer. If prior approval is given, a report must be promptly forwarded to the insurer or reinsurer; (5) permit its subproducer to serve on the insurer’s board of directors; (6) jointly employ an individual who is employed with the insurer or reinsurer unless such reinsurance intermediary-manager is under common control with the reinsurer subject to chapter 101, subchapter 13 of this title; (7) appoint a sub-managing general agent or sub-reinsurance intermediary-manager; or (8) pay interim profits until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business, or a later period set by the Commissioner for specified lines of insurance, and not until the adequacy of reserves on remaining claims has been verified pursuant to subdivision 4819(a)(2) or 4819(c)(3) of this title, if the managing general agent or reinsurance intermediary set reserves. (b) The reinsurance intermediary shall: (1) disclose in writing to the insurer any relationship with the ceding or assuming insurer and the rates, terms, and purposes of commissions, charges, and other fees that the reinsurance intermediary-manager may levy against the reinsurer; and (2) provide the reinsurer with a statement of its financial condition. (c) The acts of the reinsurance intermediary-manager shall be deemed to be the acts of the reinsurer on whose behalf it is acting within the scope of its actual or apparent authority. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)
§ 4824. Other requirements of controlling producers (a) All provisions of chapter 101, subchapter 13 of this title, to the extent they are not in conflict with the provisions of this subchapter, shall continue to apply to all parties within holding company systems subject to this subchapter. (b)(1) The controlled insurer shall provide the controlling producer with its underwriting standards, rules, and procedures, manuals setting forth the rates to be charged, and the conditions for the acceptance or rejection of risks. The controlling producer shall adhere to the standards, rules, procedures, rates, and conditions. The standards, rules, procedures, rates and conditions shall be the same as those applicable to comparable business placed with the controlled insurer by a producer other than the controlling producer. (2) The rates of the commissions, charges, and other fees shall be no greater than those applicable to comparable business placed with the controlled insurer by producers other than controlling producers. For purposes of this subdivision and subdivision (1) of this subsection, examples of “comparable business” include the same lines of insurance, same kinds of insurance, same kinds of risks, similar policy limits, and similar quality of business. (3) If the contract provides that the controlling producer, on insurance business placed with the insurer, is to be compensated contingent upon the insurer’s profits on that business, then such compensation shall not be determined and paid until at least five years after the premiums on liability insurance are earned and at least one year after the premiums are earned on any other insurance. In no event shall the commissions be paid until the adequacy of the controlled insurer’s reserves on remaining claims has been independently verified pursuant to subdivision (6) of this subsection. (4) A controlled insurer shall limit the controlling producer’s writings in relation to the controlled insurer’s surplus and total writings. The insurer may establish a different limit for each line or sub-line of business. The controlled insurer shall notify the controlling producer when the applicable limit is approached and shall not accept business from the controlling producer if the limit is reached. The controlling producer shall not place business with the controlled insurer if it has been notified by the controlled insurer that the limit has been reached. (5) A controlled insurer shall have an audit committee of the board of directors composed of independent directors. The audit committee shall annually meet with management, the insurer’s independent certified public accountants, and an independent casualty actuary or other independent loss reserve specialist acceptable to the Commissioner to review the adequacy of the insurer’s loss reserves. (6) In addition to any other required loss reserve certification, a controlled insurer shall annually, on April 1 of each year, file with the Commissioner an opinion of an independent casualty actuary, or such other independent loss reserve specialist acceptable to the Commissioner, reporting loss ratios for each line of business written and attesting to the adequacy of loss reserves established for losses incurred and outstanding as of year-end, including incurred but not reported, on business placed by the producer. (7) A controlled insurer shall annually report to the Commissioner the amount of commissions paid to the producer, the percentage such amount represents of the net premiums written, and comparable amounts and percentages paid to noncontrolling producers for placements of the same kinds of insurance. (8) A controlled insurer shall deliver written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer; except that, if the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain in his or her records a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)

Subchapter 003 : Uniform Interstate Licensing
§ 4826. Uniform interstate licensing Notwithstanding the provisions of subchapters 1 and 2 of this chapter or of chapter 142A of this title, the Commissioner may enter into reciprocal, cooperative, coordinating, and information sharing agreements with any other insurance producer licensing agency of any other jurisdiction in order to promote uniformity and efficiency of producer licensing among jurisdictions. Such agreements may be used to resolve conflicts arising from inconsistent licensing requirements of the laws of this State with the laws and regulations of any other jurisdiction. The Commissioner may approve a uniform producer license application or renewal form with tax or child support certification provisions that vary in form but not legal effect from those provided in 15 V.S.A. § 795 or 32 V.S.A. § 3113. The provisions of this subchapter shall apply to licenses granted under the provisions of chapters 131 and 142A of this title. (Added 1999, No. 38, § 2, eff. May 20, 1999.)

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