§ 27-14.3-16. Grounds for rehabilitation.
The commissioner may apply by petition to the superior court for the county of Providence
for an order authorizing the commissioner to rehabilitate a domestic insurer or an
alien insurer domiciled in this state on any one or more of the following grounds:
(1) The insurer is in a condition that the further transaction of business would be hazardous
financially to its policyholders, creditors, or the public;
(2) There is reasonable cause to believe that there has been embezzlement from the insurer,
wrongful sequestration or diversion of the insurer's assets, forgery or fraud affecting
the insurer, or other illegal conduct in, by, or with respect to the insurer that
if established would endanger assets in an amount threatening the solvency of the
insurer;
(3) The insurer has failed to remove any person who in fact has executive authority in
the insurer, whether an officer, manager, general agent, employee, or other person
if the person has been found after notice and opportunity for a hearing by the commissioner
to be dishonest or untrustworthy in a way affecting the insurer's business;
(4) Control of the insurer, whether by stock ownership or otherwise, and whether direct
or indirect, is in a person or persons found after notice and opportunity for a hearing
to be untrustworthy;
(5) Any person who in fact has executive authority in the insurer, whether an officer,
manager, general agent, director or trustee, employee, or other person, has refused
to be examined under oath by the commissioner concerning its affairs, whether in this
state or in another place, and after reasonable notice of the fact, the insurer has
failed promptly and effectively to terminate the employment and status of the person
and all of the person's influence on management;
(6) After demand by the commissioner under § 27-1-11 and chapter 13.1 of this title or under this chapter, the insurer has failed to promptly
make available for examination any of its own property, books, accounts, documents,
or other records, or those of any subsidiary or related company within the control
of the insurer, or those of any person having executive authority in the insurer so
far as they pertain to the insurer;
(7) Without first obtaining the written consent of the commissioner, the insurer has transferred,
or attempted to transfer, in a manner contrary to chapter 35 or chapter 53 of this
title, a material amount of its entire property or business, or has entered into any
transaction the effect of which is to merge, consolidate, or reinsure a material amount
of its entire property or business in or with the property or businesses of any other
person;
(8) The insurer or its property has been or is the subject of an application for the appointment
of a receiver, trustee, custodian, conservator, or sequestrator or similar fiduciary
of the insurer or its property as authorized under the insurance laws of this state,
and that appointment has been made or is imminent, and that appointment might oust
the courts of this state of jurisdiction or might prejudice orderly delinquency proceedings
under this chapter;
(9) Within the previous four (4) years the insurer has willfully violated its charter
or articles of incorporation, its bylaws, any insurance law of this state, or any
valid order of the commissioner;
(10) The insurer has failed to pay within sixty (60) days after due date any obligation
to any state or any subdivision of the state or any judgment entered in any state,
if the court in which the judgment was entered had jurisdiction over the subject matter,
except that the nonpayment shall not be a ground until sixty (60) days after any good
faith effort by the insurer to contest the obligation has been terminated, whether
it is before the commissioner or in the courts, or the insurer has systematically
attempted to compromise or renegotiate previously agreed settlements with its creditors
on the ground that it is financially unable to pay its obligations in full;
(11) The insurer has failed to file its annual report or other financial report required
by statute within the time allowed by law and, after written demand by the commissioner,
has failed to give an adequate explanation immediately; and/or
(12) The board of directors or the holders of a majority of the shares entitled to vote,
or a majority of those individuals entitled to the control of those entities specified
in § 27-35-1, request or consent to rehabilitation under this chapter.