§ 26.1-15.1-30 — Injunction - Liquidation - Receivership of domestic society

North Dakota § 26.1-15.1-30

• Jurisdiction: North Dakota
• Title 26.1: Insurance
• Ch. 26.1-15.1: Fraternal Benefit Societies

Text

1. The commissioner shall notify the society of the deficiency or deficiencies stating in
writing the reasons for the commissioner's dissatisfaction and requiring that the
deficiency or deficiencies be corrected, if the commissioner upon investigation finds
that a domestic society has committed any of the following acts:
a. Exceeded its powers.
b. Failed to comply with any provision of this chapter.
c. Not fulfilled any of its contracts in good faith.
d. Has a membership of less than four hundred after an existence of one year or
more.
e. Conducted business fraudulently or in a manner hazardous to its members,
creditors, the public, or the business.
After notice the society has a thirty-day period in which to comply with the
commissioner's request for correction. If the society fails to comply, the commissioner
shall notify the society of noncompliance and require the society to show cause on a
date specified why it should not be enjoined from carrying on any business until the
violations complained of have been corrected or why an action in quo warranto should
not be commenced against the society.
2. If the society does not present good and sufficient reasons why it should not be so
enjoined or why an action in quo warranto should not be commenced, the
commissioner may present the facts to the attorney general who may commence an
action to enjoin the society from transacting business or in quo warranto.
3. The attorney general shall thereupon notify the officers of the society of a hearing. If
after a full hearing it appears that the society should be so enjoined or liquidated or a
receiver appointed, the court shall enter the necessary order. No society so enjoined
may do business until:
a. The commissioner finds that the violation complained of has been corrected;
b. The costs of the action have been paid by the society if the court finds that the
society was in default as charged;
c. The court has dissolved its injunction; and
d. The commissioner has reinstated the certificate of authority.
4. If the court orders the society liquidated, it must be enjoined from carrying on any
further business, whereupon the receiver of the society shall proceed at once to take
possession of the books, papers, money, and other assets of the society and, under
the direction of the court, proceed forthwith to close the affairs of the society and to
distribute its funds to those entitled thereto.
5. No action under this section may be recognized in any court of this state unless
brought by the attorney general upon request of the commissioner. Whenever a
receiver is to be appointed for a domestic society, the court shall appoint the
commissioner or the commissioner's designee as receiver.
6. The provisions of this section relating to hearing by the commissioner, action by the
attorney general at the request of the commissioner, hearing by the court, injunction,
and receivership are applicable to a society that voluntarily determines to discontinue
business.