§ 26.1-06.1-20 — Powers of liquidator

North Dakota § 26.1-06.1-20

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

Text

1. The liquidator shall have the power:
a. To appoint a special deputy or deputies and to determine their reasonable
compensation. The special deputy shall have all powers of the liquidator granted
by this section.
b. To employ employees and agents, legal counsel, actuaries, accountants,
appraisers, consultants, and such other personnel as the liquidator may deem
necessary to assist in the liquidation.
c. To appoint, with the approval of the court, an advisory committee of policyholders,
claimants, or other creditors including guaranty associations should such a
committee be deemed necessary. The committee shall serve without
compensation other than reimbursement for reasonable travel and per diem living
expenses. No other committee of any nature may be appointed by the
commissioner or the court in liquidation proceedings conducted under this
chapter.
d. To fix the reasonable compensation of employees and agents, legal counsel,
actuaries, accountants, appraisers, and consultants with the approval of the
court.
e. To pay reasonable compensation to persons appointed and to defray from the
funds or assets of the insurer all expenses of taking possession of, conserving,
conducting, liquidating, disposing of, or otherwise dealing with the business and
property of the insurer. In the event that the property of the insurer does not
contain sufficient cash or liquid assets to defray the costs incurred, the
commissioner may advance the costs so incurred out of any appropriation for the
maintenance of the insurance department. Any amounts so advanced for

expenses of administration must be repaid to the commissioner for the use of the
insurance department out of the first available moneys of the insurer.
f. To hold hearings, to subpoena witnesses to compel their attendance, to
administer oaths, to examine any person under oath, and to compel any person
to subscribe to their testimony after it has been correctly reduced to writing; and
in connection therewith to require the production of any books, papers, records,
or other documents the liquidator deems relevant to the inquiry.
g. To audit the books and records of all agents of the insurer insofar as those
records relate to the business activities of the insurer.
h. To collect all debts and moneys due and claims belonging to the insurer,
wherever located, and for the following purposes:
(1) To institute timely action in other jurisdictions, in order to forestall
garnishment and attachment proceedings against such debts;
(2) To do such other acts as are necessary or expedient to collect, conserve, or
protect its assets or property, including the power to sell, compound,
compromise, or assign debts for purposes of collection upon such terms and
conditions as deemed best; and
(3) To pursue any creditor's remedies available to enforce the liquidator's
claims.
i. To conduct public and private sales of the property of the insurer.
j. To use assets of the estate of an insurer under a liquidation order to transfer
policy obligations to a solvent assuming insurer, if the transfer can be arranged
without prejudice to applicable priorities under section 26.1-06.1-41.
k. To acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or
otherwise dispose of or deal with, any property of the insurer at its market value
or upon such terms and conditions as are fair and reasonable. The liquidator shall
also have power to execute, acknowledge, and deliver any and all deeds,
assignments, releases, and other instruments necessary or proper to effectuate
any sale of property or other transaction in connection with the liquidation.
l. To borrow money on the security of the insurer's assets or without security and to
execute and deliver all documents necessary to that transaction for the purpose
of facilitating the liquidation. Any such funds borrowed may be repaid as an
administrative expense and have priority over any other claims in class one under
the priority of distribution.
m. To enter into such contracts as are necessary to carry out the order to liquidate,
and to affirm or disavow any contracts to which the insurer is a party.
n. To continue to prosecute and to institute in the name of the insurer or in the name
of the liquidator, any and all suits and other legal proceedings, in this state or
elsewhere, and to abandon the prosecution of claims the liquidator deems
unprofitable to pursue further. If the insurer is dissolved under section
26.1-06.1-19, the liquidator shall have the power to apply to any court in this state
or elsewhere for leave to substitute the liquidator for the insurer as plaintiff.
o. To prosecute any action which may exist in behalf of the creditors, members,
policyholders, or shareholders of the insurer against any officer of the insurer, or
any other person.
p. To remove any or all records and property of the insurer to the offices of the
commissioner or to another place as may be convenient for the purposes of
efficient and orderly execution of the liquidation. Guaranty associations and
foreign guaranty associations shall have such reasonable access to the records
of the insurer as is necessary for them to carry out their statutory obligations.
q. To deposit in one or more banks in this state any amounts of money required for
meeting current administration expenses and dividend distributions.
r. To invest all moneys not currently needed, unless the court orders otherwise.
s. To file any necessary documents for record in the office of any recorder or record
office in this state or elsewhere where property of the insurer is located.

t. To assert all defenses available to the insurer as against third persons, including
statutes of limitation, statutes of fraud, and the defense of usury. A waiver of any
defense by the insurer after a petition in liquidation has been filed shall not bind
the liquidator. Whenever a guaranty association or foreign guaranty association
has an obligation to defend any suit, the liquidator shall give precedence to such
obligation and may defend only in the absence of a defense by such guaranty
associations.
u. To exercise and enforce all the rights, remedies, and powers of any creditor,
shareholder, policyholder, or member, including any power to avoid any transfer
or lien that may be given by the general law and that is not included in section
26.1-06.1-25, 26.1-06.1-26, or 26.1-06.1-27.
v. To intervene in any proceeding, wherever instituted, that might lead to the
appointment of a receiver or trustee, and to act as the receiver or trustee
whenever the appointment is offered.
w. To enter into agreements with any receiver or commissioner of any other state
relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer
doing business in both states.
x. To exercise all powers now held or hereafter conferred upon receivers by the
laws of this state not inconsistent with the provisions of this chapter.
2. a. If a company placed in liquidation issued liability policies on a claims-made basis,
which provided an option to purchase an extended period to report claims, then
the liquidator may make available to holders of such policies, for a charge, an
extended period to report claims as stated herein. The extended reporting period
may be made available only to those insureds who have not secured substitute
coverage. The extended period made available by the liquidator begins upon
termination of any extended period to report claims in the basic policy and ends
at the earlier of the final date for filing of claims in the liquidation proceeding or
eighteen months from the order of liquidation.
b. The extended period to report claims made available by the liquidator is subject
to the terms of the policy to which it relates. The liquidator shall make available
such extended period within sixty days after the order of liquidation at a charge to
be determined by the liquidator subject to approval of the court. The offer must be
deemed rejected unless the offer is accepted in writing and the charge is paid
within ninety days after the order of liquidation. No commissions, premium taxes,
assessments, or other fees may be due on the charge pertaining to the extended
period to report claims.
3. The enumeration of the powers and authority of the liquidator in this section may not
be construed as a limitation upon the liquidator, nor does it exclude in any manner the
liquidator's right to do such other acts not herein specifically enumerated or otherwise
provided for, as may be necessary or appropriate for the accomplishment of or in aid
of the purpose of liquidation.
4. Notwithstanding the powers of the liquidator as stated in subsections 1 and 2, the
liquidator shall have no obligation to defend claims or to continue to defend claims
subsequent to the entry of a liquidation order.