1.An order to liquidate the business of a domestic insurer must appoint the
commissioner and successor commissioners in office as liquidator and must direct the
liquidator forthwith to take possession of the assets of the insurer and to administer
them under the general supervision of the court. The liquidator must be vested by
operation of law with the title to all of the property, contracts, and rights of action, and
all of the books and records of the insurer, wherever located, as of the entry of the final
order of liquidation. The filing or recording of the order with the recorder, unless the
board of county commissioners designates a different official, of the county in which its
principal office or place of business is located or, in the case of real estate, with the
recorder of the
Free access — add to your briefcase to read the full text and ask questions with AI
1. An order to liquidate the business of a domestic insurer must appoint the
commissioner and successor commissioners in office as liquidator and must direct the
liquidator forthwith to take possession of the assets of the insurer and to administer
them under the general supervision of the court. The liquidator must be vested by
operation of law with the title to all of the property, contracts, and rights of action, and
all of the books and records of the insurer, wherever located, as of the entry of the final
order of liquidation. The filing or recording of the order with the recorder, unless the
board of county commissioners designates a different official, of the county in which its
principal office or place of business is located or, in the case of real estate, with the
recorder of the county where the property is located, imparts the same notice as a
deed, bill of sale, or other evidence of title duly filed or recorded with that recorder or
designated official.
2. Upon issuance of the order, the rights and liabilities of any such insurer and of its
creditors, policyholders, shareholders, members, and all other persons interested in its
estate become fixed as of the date of entry of the order of liquidation, except as
provided in sections 26.1-06.1-18 and 26.1-06.1-36.
3. An order to liquidate the business of an alien insurer domiciled in this state must be in
the same terms and have the same legal effect as an order to liquidate a domestic
insurer, except that the assets and the business in the United States must be the only
assets and business included therein.
4. At the time of petitioning for an order of liquidation, or at any time thereafter, the
commissioner, after making appropriate findings of an insurer's insolvency, may
petition the court for a judicial declaration of such insolvency. After providing such
notice and hearing as it deems proper, the court may make the declaration.
5. Any order issued under this section must require financial reports to the court by the
liquidator. Financial reports must include the assets and liabilities of the insurer and all
funds received or disbursed by the liquidator during the current period. Financial
reports must be filed within one year of the liquidation order and at least annually
thereafter.
6. a. Within five days of July 7, 1991, or, if later, within five days after the initiation of an
appeal of an order of liquidation, which order has not been stayed, the
commissioner shall present for the court's approval a plan for the continued
performance of the defendant company's policy claims obligations, including the
duty to defend insureds under liability insurance policies, during the pendency of
an appeal. Such plan must provide for the continued performance and payment
of policy claims obligations in the normal course of events, notwithstanding the
grounds alleged in support of the order of liquidation, including the ground of
insolvency. In the event the defendant company's financial condition will not, in
the judgment of the commissioner, support the full performance of all policy
claims obligations during the appeal pendency period, the plan may prefer the
claims of certain policyholders and claimants over creditors and interested parties
as well as other policyholders and claimants, as the commissioner finds to be fair
and equitable considering the relative circumstances of such policyholders and
claimants. The court shall examine the plan submitted by the commissioner and if
it finds the plan to be in the best interests of the parties, the court shall approve
the plan. No action may lie against the commissioner, or any deputies, agents,
clerks, assistants, or attorneys employed or appointed by the commissioner by
any party based on preference in an appeal pendency plan approved by the
court.
b. The appeal pendency plan does not supersede or affect the obligations of any
insurance guaranty association.
c. Any such plans must provide for equitable adjustments to be made by the
liquidator to any distributions of assets to guaranty associations, in the event that
the liquidator pays claims from assets of the estate, which would otherwise be the
obligations of any particular guaranty association but for the appeal of the order
of liquidation, such that all guaranty associations equally benefit on a pro rata
basis from the assets of the estate. Further, in the event an order of liquidation is
set aside upon any appeal, the company may not be released from delinquency
proceedings unless and until all funds advanced by any guaranty association,
including reasonable administrative expenses in connection therewith relating to
obligations of the company, are repaid in full, together with interest at the
judgment rate of interest or unless an arrangement for repayment thereof has
been made with the consent of all applicable guaranty associations.