§ 26.1-06.1-03 — Definitions

North Dakota § 26.1-06.1-03

• Jurisdiction: North Dakota
• Title 26.1: Insurance
• Ch. 26.1-06.1: Insurance Company Rehabilitation and Liquidation

Text

For the purposes of this chapter:
1. "Ancillary state" means any state other than a domiciliary state.
2. "Creditor" is a person having any claim, whether matured or unmatured, liquidated or
unliquidated, secured or unsecured, absolute, fixed, or contingent.
3. "Delinquency proceeding" means any proceeding instituted against an insurer for the
purpose of liquidating, rehabilitating, reorganizing, or conserving such insurer, and any
summary proceeding under section 26.1-06.1-09. "Formal delinquency proceeding"
means any liquidation or rehabilitation proceeding.

4. "Doing business" includes any of the following acts, whether effected by mail or
otherwise:
a. The issuance or delivery of contracts of insurance to residents of this state;
b. The solicitation of applications for such contracts, or other negotiations
preliminary to the execution of such contracts;
c. The collection of premiums, membership fees, assessments, or other
consideration for such contracts;
d. The transaction of matters subsequent to execution of such contracts and arising
out of them;
e. Operating under a license or certificate of authority, as an insurer, issued by the
commissioner; or
f. Any other act specified in section 26.1-02-06 as the transaction of an insurance
business.
5. "Domiciliary state" means the state in which an insurer is incorporated or organized or,
in the case of an alien insurer, its state of entry.
6. "Fair consideration" is given for property or obligation:
a. When in exchange for property or obligation, as a fair equivalent therefor, and in
good faith, property is conveyed or services are rendered or an obligation is
incurred or an antecedent debt is satisfied; or
b. When property or obligation is received in good faith to secure a present advance
or antecedent debt in an amount not disproportionately small as compared to the
value of the property or obligation obtained.
7. "Foreign country" means any other jurisdiction not in any state.
8. "General assets" means all property, real, personal, or otherwise, not specifically
mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit of
specified persons or classes of persons. As to specifically encumbered property,
"general assets" includes all property or its proceeds in excess of the amount
necessary to discharge the sum or sums secured thereby. Assets held in trust and on
deposit for the security or benefit of all policyholders or all policyholders and creditors,
in more than a single state, shall be treated as general assets.
9. "Guaranty association" means the North Dakota insurance guaranty association
created by chapter 26.1-42.1 or the North Dakota life and health insurance guaranty
association created by chapter 26.1-38.1, and any other similar entity now or hereafter
created by the legislative assembly for the payment of claims of insolvent insurers.
"Foreign guaranty association" means any similar entity now in existence in or
hereafter created by the legislature of any other state.
10. "Insolvency" or "insolvent" means:
a. For an insurer issuing only assessable fire insurance policies:
(1) The inability to pay any obligation within thirty days after it becomes
payable; or
(2) If an assessment be made within thirty days after such date, the inability to
pay the obligation thirty days following the date specified in the first
assessment notice issued after the date of loss.
b. For any other insurer, that it is unable to pay its obligations when they are due, or
when its admitted assets do not exceed its liabilities plus the greater of:
(1) Any capital and surplus required by law for its organization; or
(2) The total par or stated value of its authorized and issued capital stock.
c. As to any insurer licensed to do business in this state as of July 7, 1991, which
does not meet the standard established under subdivision b, the term
"insolvency" or "insolvent" means, for a period not to exceed three years from
July 7, 1991, that it is unable to pay its obligations when they are due or that its
admitted assets do not exceed its liabilities plus any required capital contribution
ordered by the commissioner under provisions of the insurance law.
d. For purposes of this subsection, "liabilities" includes reserves required by statute,
by rule, or by specific requirements imposed by the commissioner upon a subject
company at the time of admission or a later time.

11. "Insurer" means any person who has done, purports to do, is doing, or is licensed to
do an insurance business, and is or has been subject to the authority of, or to
liquidation, rehabilitation, reorganization, supervision, or conservation by any other
state. For purposes of this chapter, any other persons included under section
26.1-06.1-02 shall be deemed to be insurers.
12. "Policyholder" includes a certificate holder.
13. "Preferred claim" means any claim with respect to which the terms of this chapter
accord priority of payment from the general assets of the insurer.
14. "Receiver" means receiver, liquidator, rehabilitator, or conservator as the context
requires.
15. "Reciprocal state" means any state other than this state in which in substance and
effect subsection 1 of section 26.1-06.1-17 and sections 26.1-06.1-51, 26.1-06.1-52,
26.1-06.1-54, 26.1-06.1-55, and 26.1-06.1-56 are in force, and in which provisions are
in force requiring that the commissioner or equivalent official be the receiver of a
delinquent insurer, and in which some provision exists for the avoidance of fraudulent
conveyances and preferential transfers.
16. "Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as
security, escrow, or otherwise, but not including special deposit claims or claims
against general assets. The term also includes claims which have become liens upon
specific assets by reason of judicial process.
17. "Special deposit claim" means any claim secured by a deposit made pursuant to
statute for the security or benefit of a limited class or classes of persons, but not
including any claim secured by general assets.
18. "State" means any state, district, or territory of the United States and the Panama
Canal Zone.
19. "Transfer" includes the sale and every other and different mode, direct or indirect, of
disposing of or of parting with property or with an interest therein, or with the
possession thereof or of fixing a lien upon property or upon an interest therein,
absolutely or conditionally, voluntarily, by or without judicial proceedings. The retention
of a security title to property delivered to a debtor shall be deemed a transfer suffered
by the debtor.