(1)An order to liquidate the business of a
domestic insurer shall appoint the commissioner as liquidator and shall direct the
liquidator forthwith to take possession of the assets of the insurer and to
administer them under the general supervision of the court. The liquidator shall be
vested by operation of law with title to all of the property, contracts, rights of
action, and books and records of the insurer ordered liquidated, wherever located,
as of the entry of the final order of liquidation. The filing or recording of the order
with the clerk of the district court in and for the city and county of Denver and the
recorder of deeds of the county in which its principal office or place of business is
located or, in the case of real estate, with the recorder of deeds of the coun
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(1) An order to liquidate the business of a
domestic insurer shall appoint the commissioner as liquidator and shall direct the
liquidator forthwith to take possession of the assets of the insurer and to
administer them under the general supervision of the court. The liquidator shall be
vested by operation of law with title to all of the property, contracts, rights of
action, and books and records of the insurer ordered liquidated, wherever located,
as of the entry of the final order of liquidation. The filing or recording of the order
with the clerk of the district court in and for the city and county of Denver and the
recorder of deeds of the county in which its principal office or place of business is
located or, in the case of real estate, with the recorder of deeds of the county
where the property is located, shall impart the same notice as would be imparted by
a deed, bill of sale, or other evidence of title duly filed or recorded with that
recorder of deeds.
(2) Upon issuance of the order, the rights and liabilities of any such insurer
and of its creditors, policyholders, shareholders, members, and all other persons
interested in its estate shall become fixed as of the date of entry of the order of
liquidation except as provided in sections 10-3-518 and 10-3-536.
(3) An order to liquidate the business of an alien insurer domiciled in this
state shall be in the same terms and have the same legal effect as an order to
liquidate a domestic insurer; except that the assets and the business in the United
States shall be the only assets and business included therein.
(4) At the time of petitioning for an order of liquidation or at any time
thereafter, the commissioner, after making appropriate findings of an insurer's
insolvency, may petition the court for a judicial declaration of such insolvency. After
providing such notice and holding such hearing as it deems proper, the court may
make the declaration.
(5) Any order issued under this section shall require financial reports to the
court by the liquidator. Financial reports shall include, at a minimum, the assets and
liabilities of the insurer and all funds received or disbursed by the liquidator during
the current period. Financial reports shall be filed within one year of the liquidation
order and at least annually thereafter.
(6) Within five days after July 1, 1992, or, if later, within five days after the
initiation of an appeal of an order of liquidation, unless such order has been stayed,
the commissioner shall present for the court's approval a plan for the continued
performance of the defendant company's policy claims obligations, including the
duty to defend insureds under liability insurance policies, during the pendency of
the appeal. Such plan shall provide for the continued performance and payment of
policy claims obligations in the normal course of events, notwithstanding the
grounds alleged in support of the order of liquidation including the ground of
insolvency. In the event the defendant company's financial condition will not, in the
judgment of the commissioner, support the full performance of all policy claims
obligations during the pendency of the appeal, the plan may prefer the claims of
certain policyholders and claimants over creditors and interested parties as well as
other policyholders and claimants, as the commissioner finds to be fair and
equitable considering the relative circumstances of such policyholders and
claimants. The court shall examine the plan submitted by the commissioner and, if it
finds the plan to be in the best interests of the parties, the court shall approve the
plan. No action shall lie against the commissioner or any of the commissioner's
deputies, agents, clerks, assistants, or attorneys by any party based on preference
in an appeal pendency plan approved by the court.
(7) The appeal pendency plan effected pursuant to subsection (6) of this
section shall not supersede or affect the obligations of any insurance guaranty
association.
(8) Any appeal pendency plan effected pursuant to subsection (6) of this
section shall provide for equitable adjustments to be made by the liquidator to any
distributions of assets to guaranty associations, in the event that the liquidator pays
claims from assets of the estate which would otherwise be the obligations of any
particular guaranty association but for the appeal of the order of liquidation, such
that all guaranty associations equally benefit on a pro rata basis from the assets of
the estate. Further, in the event an order of liquidation is set aside upon any appeal,
the company shall not be released from delinquency proceedings unless and until
all funds advanced by any guaranty association, including reasonable
administrative expenses in connection therewith, relating to obligations of the
company have been repaid in full together with interest at the judgment rate of
interest, or unless an arrangement for repayment thereof has been made with the
consent of all applicable guaranty associations.