§ 10-3-533.5 — Sale of insolvent insurer as a going concern

Colorado § 10-3-533.5

• Jurisdiction: Colorado
• Title 10: Insurance
• Art.: Regulation of Insurance Companies

Text

(1) (a) The
domiciliary receiver may apply to the court for permission to sell an insolvent
domestic insurer as a going concern. If the court determines that the sale of the
insurer as a going concern is in the best interest of the estate and that the sale will
not diminish the value of the claims of shareholders and creditors, the court shall
order that the insurer be discharged from all of its liabilities, that the outstanding
shares of the insurer be canceled, that for no additional consideration new shares
of the insurer be issued in the name of the receiver, that the receiver be vested with
title to the new shares, which shares shall be deemed validly issued, fully paid, and
nonassessable pursuant to applicable law, and that the receiver be authorized to
sell the shares, together with such state or federal income or other tax credits or
deductions of the insurer as the receiver determines to be in the best interest of the
estate. Upon confirmation of the sale by the court, the purchasers of the shares
shall be vested with title to those shares, including any such tax credits of the
insurer, free and clear of all claims and defenses. The proceeds from the sale of the
shares shall become a part of the general assets of the estate in liquidation.

(b) A sale under this section does not affect the rights and liabilities of the
estate of the insurer and of its creditors, policyholders, shareholders, members, and
all other persons interested in the estate as fixed under section 10-3-541. No person
is entitled to any priority or preference rights in the proceeds of the sale except as
fixed under said section 10-3-541.

(c) As used in this section, shares has the same meaning as set forth in
section 7-101-401 (31), C.R.S., and includes any secured party or other person or
holder who has or claims to have any interest of any kind in any shares of the
insurer.

(2) The enumeration of the powers and authority of the domiciliary receiver
in this section shall not be construed as a limitation upon the receiver, nor shall it
exclude in any manner the right to do such other acts not specifically enumerated
in this section or otherwise provided for as may be necessary or appropriate for the
accomplishment of or in aid of the purpose of liquidation.

(3) Nothing in this section shall be deemed a waiver of capitalization, surplus
requirements, or any other condition of licensure imposed by this title for the
issuance of a certificate of authority to do insurance business or for the change in
control of a foreign or domestic insurer.

(4) This section shall be liberally construed to accomplish its purpose to
provide a more expeditious and effective procedure for marshaling the assets of
the estate in order to realize the maximum amount possible from the sale of those
assets and ensure that the purchasers receive clear and marketable titles.

Legislative History

Source: L. 92: Entire part R&RE, p. 1469, � 14, effective July 1. L. 93: (1)(c) amended, p. 859, � 21, effective July 1, 1994. L. 2005: (1)(c) amended, p. 762, � 13, effective June 1.