North Dakota § 26.1-10-10.1 Recovery

North Dakota Statutes

§ 26.1-10-10.1 — Recovery

North Dakota § 26.1-10-10.1

Title 26.1Insurance

Ch. 26.1-10Insurance Holding Company Systems

This text of North Dakota § 26.1-10-10.1 (Recovery) is published on Counsel Stack Legal Research, covering North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

N.D. Cent. Code § 26.1-10-10.1 (2026).

Text

1.If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order may recover on behalf of the insurer:

a.From any parent corporation or holding company or person or affiliate that otherwise controlled the insurer, the amount of distributions other than distributions of shares of the same class of stock, paid by the insurer on its capital stock; or

b.Any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or its subsidiaries to a director, officer, or employee, if the distribution or payment under this subsection is made at any time during the one year preceding the petition for liquidation, conservation, or rehabilitation subject to the limitations of subsect

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1. If an order for liquidation or rehabilitation of a domestic insurer has been entered, the
receiver appointed under the order may recover on behalf of the insurer:
a. From any parent corporation or holding company or person or affiliate that
otherwise controlled the insurer, the amount of distributions other than
distributions of shares of the same class of stock, paid by the insurer on its capital
stock; or
b. Any payment in the form of a bonus, termination settlement, or extraordinary
lump sum salary adjustment made by the insurer or its subsidiaries to a director,
officer, or employee, if the distribution or payment under this subsection is made
at any time during the one year preceding the petition for liquidation,
conservation, or rehabilitation subject to the limitations of subsections 2, 3, and 4.
2. A distribution may not be recovered if the parent or affiliate 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 the ability of the
insurer to fulfill its contractual obligations.
3. Any person that was a parent corporation or holding company or a person that
otherwise controlled the insurer or affiliate at the time the distributions were paid is
liable up to the amount of distributions or payments under subsection 1 the person
received. Any person that otherwise controlled the insurer at the time the distributions

were declared is liable up to the amount of distributions the person would have
received if the person had been paid immediately. If two or more persons are liable
with respect to the same distributions, they are jointly and severally liable.
4. The maximum amount recoverable under this section is the amount needed in excess
of all other available assets of the impaired or insolvent insurer to pay the contractual
obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
5. To the extent that any person liable under subsection 3 is insolvent or otherwise fails to
pay claims due from it, its parent corporation or holding company or person that
otherwise controlled it at the time the distribution was paid must be jointly and
severally liable for any resulting deficiency in the amount recovered from the parent
corporation or holding company or person that otherwise controlled it.