§ 38a-907 — (Formerly Sec. 38-425). Injunctions, orders and stays.

Connecticut § 38a-907

• Jurisdiction: Connecticut
• Title 38a: Insurance
• Ch. 704c: Insurers Rehabilitation and Liquidation Act and Termination of Domestic Life Insurance Companies

Text

(a) The conservation, rehabilitation and liquidation of insurance companies and other persons subject to the provisions of sections 38a-903 to 38a-961, inclusive, are a matter of vital public interest and affect the relationships between insureds and their insurers. (1) An application or petition under sections 38a-912 , 38a-914 , 38a-915 , 38a-918 , 38a-919 and 38a-920 , shall operate as an automatic stay applicable to all persons, other than the receiver, which shall be permanent and survive the entry of an order of conservation, rehabilitation or liquidation, and which shall prohibit: (A) The transaction of further business; (B) the transfer of property; (C) interference with the receiver or with a proceeding under said sections; (D) waste of the insurer's assets; (E) dissipation and transfer of bank accounts; (F) the institution or further prosecution of any actions or proceedings in which the insurer is a party; (G) the obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer, its assets or its policyholders; (H) the levying of execution against the insurer, its assets, or its policyholders; (I) the making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer; (J) the withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or (K) any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors, or shareholders, or the administration of any proceeding under said sections. (2) Notwithstanding any other provision of law, no bond shall be required of the commissioner as a prerequisite for the issuance of any injunction or restraining order pursuant to this section. (3) Upon motion of a person subject to the stay, the court, after notice to the receiver and a hearing, may modify or grant relief from the stay, provided said person shall have the burden of proof and shall establish by clear and convincing evidence that such relief should be granted. (4) All matters that may be stayed, enjoined or barred under this section and all matters involving its interpretation or operation shall remain within the exclusive jurisdiction of the domiciliary receivership court. (b) The receiver may apply to any court outside of the state for the relief described in subsection (a) of this section.

Legislative History

(P.A. 79-382, S. 5; P.A. 98-214, S. 4.) History: Sec. 38-425 transferred to Sec. 38a-907 in 1991; P.A. 98-214 amended Subsec. (a) to replace introductory language authorizing restraining orders and injunctions with language re the vital public interest in the conservation, rehabilitation and liquidation of insurance companies, et al., inserted introductory language following Subdiv. (a)(1) designator concerning the operation of, and prohibitions under, applications or petitions, redesignated former Subdivs. as Subparas., limited newly designated Subsec. (a)(1)(F) to actions or proceedings in which the insurer is a party and added new Subdivs. (2) to (4), inclusive, re bonds, relief from stay and jurisdiction, respectively.