§ 27-9-3-16 — Preferences

Indiana § 27-9-3-16

• Jurisdiction: Indiana
• Title 27: INSURANCE
• Art. 9: SUPERVISION; REHABILITATION
• Ch. 3: Formal Proceedings

Text

(a) A preference is a transfer of any of the
property of an insurer to or for the benefit of a creditor, for or on
account of an antecedent debt, made or suffered by the insurer within
one (1) year before the filing of a successful petition for liquidation
under IC 27-9, the effect of which transfer may be to enable the
creditor to obtain a greater percentage of this debt than another creditor
of the same class would receive. If a liquidation order is entered while
the insurer is already subject to a rehabilitation order, then that transfer
shall be considered a preference if made or suffered within one (1) year
before the filing of the successful petition for rehabilitation, or within
two (2) years before the filing of the successful petition for liquidation,
whichever time is shorter.
(b) A preference may be avoided by the liquidator if:
(1) the insurer was insolvent at the time of the transfer;
(2) the transfer was made within four (4) months before the filing
of the petition;
(3) the creditor receiving it or to be benefited by it or his agent
acting with reference to it had, at the time when the transfer was
made, reasonable cause to believe that the insurer was insolvent
or was about to become insolvent; or
(4) the creditor receiving it was an officer, or any employee or
attorney or other person who was in fact in a position of
comparable influence in the insurer to an officer whether or not
he held such a position, or any shareholder holding directly or
indirectly more than five percent (5%) of any class of any equity
security issued by the insurer, or any other person, firm, limited
liability company, corporation, association, or aggregation of
persons with whom the insurer did not deal at arm's length.
(c) Where the preference is voidable, the liquidator may recover the
property or, if it has been converted, its value from any person who has
received or converted the property, except where a bona fide purchaser
or lienor has given less than fair equivalent value, he shall have a lien
upon the property to the extent of the consideration actually given by
him. Where a preference by way of lien or security title is voidable, the
court may on due notice order the lien or title to be preserved for the
benefit of the estate, in which event the lien or title shall pass to the
liquidator.
As added by Acts 1979, P.L.255, SEC.1. Amended by
P.L.8-1993, SEC.433.