(a) An order to rehabilitate a domestic insurer must require the director to take immediate possession of the property of the insurer and to conduct its business, and to take steps toward removal of the causes and conditions that have made rehabilitation necessary as the court may direct.
(b) If at any time the director considers that further efforts to rehabilitate the insurer would be useless, the director may apply to the court for an order of liquidation.
(c) The director, or an interested person upon due notice to the director, at any time may apply to the court for an order terminating the rehabilitation proceedings and permitting the insurer to resume possession of its property and the conduct of its business, but the order may not be made or entered except when, after a hearing, the court has determined that the purposes of the proceeding have been fully accomplished.
(d) An order issued under this section must require an accounting to the court by the receiver. Accountings must be at the intervals that the court specifies in its order.
(e) Entry of an order of rehabilitation does not constitute an anticipatory breach of contracts of the issuer.
(f) A court in this state before which an action or proceeding is pending in which the insurer is a party or in which the insurer is obligated to defend a party shall stay the action or proceeding when a rehabilitation order against the insurer is entered. The stay shall be imposed for that period of time necessary for the receiver to obtain proper representation and prepare for further proceedings. The receiver shall take action respecting the pending litigation that the receiver considers necessary in the interests of justice and for the protection of creditors, policyholders, and the public. The receiver shall immediately consider all litigation pending outside this state and shall petition the courts having jurisdiction over that litigation for stays if necessary to protect the estate of the insurer.
(g) A statute of limitations or defense of laches does not run with respect to an action by or against an insurer between the filing of a petition for appointment of a receiver for the insurer and the order granting or denying that petition. An action by or against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the order of rehabilitation is entered or the petition is denied.
(h) A guaranty association or foreign guaranty association has standing to appear in a court proceeding concerning the rehabilitation of a domestic insurer if the association is or might become liable to act as a result of the rehabilitation.Section: Previous 21.78.020 21.78.030 21.78.040 21.78.050 21.78.060 21.78.070 21.78.080 21.78.090 21.78.100 21.78.110 21.78.120 21.78.130 21.78.140 21.78.150 21.78.160 Next
Last modified: November 15, 2016