(a) When under this chapter a receiver is to be appointed in delinquency proceeding for a domestic or alien insurer, the court shall appoint the director as the receiver. The court shall order the director immediately to take possession of the assets of the insurer and to administer the assets under orders of the court.
(b) As a domiciliary receiver, the director shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records of the insurer, wherever located, as of the date of entry of the order directing the director to rehabilitate or liquidate a domestic insurer or to liquidate the United States branch of an alien insurer domiciled in this state, and the director shall have the right to recover the same and reduce the same to possession; except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers that are herein prescribed for ancillary receivers appointed in this state as to assets located in this state.
(c) The filing or recording of the order directing possession to be taken, or a certified copy of the order, in any office where instruments affecting title to property are required to be filed or recorded shall impart the same notice as would be imparted by a deed, bill of sale, or other evidence of title duly filed or recorded.
(d) The director as domiciliary receiver shall be responsible for the proper administration of all assets coming into the possession or control of the director. The court may at any time require a bond from the director or a deputy of the director if considered desirable for the protection of the assets.
(e) Upon taking possession of the assets of an insurer, the domiciliary receiver shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take steps authorized by this chapter for the purpose of rehabilitating, liquidating, or conserving the affairs or assets of the insurer.
(f) In connection with delinquency proceedings, the director may appoint one or more special deputies and the director may employ counsel, clerks, and assistants that the director considers necessary. The compensation of the special deputies, counsel, clerks, or assistants and all expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the receiver, subject to the approval of the court, and shall be paid out of the funds or assets of the insurer. Within the limits of duties imposed upon them, special deputies shall possess all the powers given to, and in the exercise of those powers shall be subject to all of the duties imposed upon, the receiver with respect to the proceedings.
(g) If it appears to the receiver that there has been a violation of civil or criminal law, or breach of a contractual or fiduciary obligation detrimental to the insurer by an officer, manager, insurance producer, employee, or other person, the receiver may pursue all appropriate legal remedies on behalf of the insurer.
(h) If the receiver determines that reorganization, consolidation, conversion, reinsurance, merger, or other transformation of the insurer is appropriate, the receiver shall prepare a plan to implement the changes. Upon application of the receiver for approval of the plan, and after the notice and hearings that the court prescribes, the court may either approve or disapprove the plan proposed or may modify it and approve it as modified. A plan approved under this section must be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the receiver shall carry out the plan. In the case of a life insurer, the plan proposed may include the imposition of liens upon the policies of the company, if all rights of shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies, for the period, and to the extent, considered necessary.
(i) If the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the director may advance the costs incurred out of an appropriation to the division for that purpose. Amounts advanced for expenses of administration must be repaid to the state out of the first available money of the insurer.
(j) The receiver may
(1) hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine a person under oath, and compel a person to subscribe to the person's testimony after it has been correctly reduced to writing, and may require the production of books, papers, records, or other documents that the receiver determines are relevant to the inquiry;
(2) remove records and property of the insurer to the offices of the director or to another place that is convenient for the purposes of efficient and orderly execution of the liquidation; a guaranty association or a foreign guaranty association shall be allowed reasonable access to the records of the insurer that is necessary for the association to carry out its statutory obligations;
(3) intervene in a proceeding, wherever instituted, that might lead to the appointment of a receiver or trustee, and may act as the receiver or trustee if the appointment is offered;
(4) enter into agreements with a receiver or commissioner of another state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both this state and the other state.Section: Previous 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 21.78.170 21.78.180 21.78.190 21.78.200 Next
Last modified: November 15, 2016