§ 38a-933a — Amounts recoverable. Affiliate liability. Timing of proceedings.

(a) If an order instituting a delinquency proceeding against an insurer authorized to do business in this state is entered under this chapter, the receiver appointed under the order has a right to recover on behalf of the insurer from any affiliate that controlled the insurer the amount of distributions, other than stock dividends paid by the insurer on its capital stock, made at any time during the five years preceding the petition for liquidation, rehabilitation or conservation. This recovery is subject to the limitations of subsections (b) to (g), inclusive, of this section. For purposes of this section, “distribution” includes any dividend, or any loan, advance, payment or other transfer for which the insurer did not receive fair consideration prior to the commencement of delinquency proceedings. (b) No distribution is recoverable if the recipient shows that, when paid, the distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that the distribution might adversely affect its solvency. (c) The maximum amount recoverable under this section is the amount needed, in excess of all other available assets, to pay all claims under the receivership, reduced for each recipient by any amount the recipient has already paid to receivers under similar laws of other states. (d) Any person who was an affiliate that controlled the insurer at the time the distributions were paid is liable up to the amount of distributions received. Any person who was an affiliate that controlled the insurer at the time the distributions were declared is liable up to the amount of distributions he would have received if he had been paid immediately. If two or more persons are liable regarding the same distributions, they shall be jointly and severally liable. (e) If any person liable under subsection (d) of this section is insolvent, all affiliates that controlled that person at the time the dividend was declared or paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate. (f) An action or proceeding under this section may not be commenced after the earlier of: (1) Two years after the appointment of a rehabilitator under section 38a-915 or a liquidator under section 38a-920 ; or (2) the date the rehabilitation is terminated under subsection (b) of section 38a-918 or the liquidation is terminated under section 38a-948 .

Legislative History

(P.A. 98-214, S. 15.)