§ 27-14.3-18. Powers and duties of rehabilitator.
(a) The commissioner as rehabilitator may appoint one or more special deputies who shall
have all of the powers and responsibilities of the rehabilitator granted under this
section, and the commissioner may employ counsel, clerks, and assistants as necessary.
The compensation of the special deputy, counsel, clerks, and assistants and all of
the expenses of taking possession of the insurer and of conducting the proceedings
shall be fixed by the commissioner, with the approval of the court, and shall be paid
out of the funds or assets of the insurer. The persons appointed under this section
shall serve at the pleasure of the commissioner. The commissioner, as rehabilitator,
may, with the approval of the court, appoint an advisory committee of policyholders,
claimants, or other creditors including guaranty associations should an advisory committee
be deemed necessary; provided, that if a nonprofit hospital service corporation, nonprofit
medical service corporation, or nonprofit dental service corporation is subject to
an order of rehabilitation, the commissioner shall appoint an advisory committee of
creditors to include Rhode Island nonprofit hospitals. The committee shall serve at
the pleasure of the commissioner and shall serve without compensation other than reimbursement
for reasonable travel and per diem living expenses. No other committee of any nature
shall be appointed by the commissioner or the court in rehabilitation proceedings
conducted under this chapter.
(b) 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 incurred
costs out of any appropriation for the maintenance of the division of insurance. Any
advanced amounts for expenses of administration shall be repaid to the commissioner
for the use of the insurance department out of the first available money of the insurer.
(c) The commissioner may reimburse the division of insurance and its agents and consultants
at its statutory examination rate and/or reasonable consultants' rate for reasonable
costs incurred in the examination and the investigation in anticipation of the rehabilitation
of the insurer and in the rehabilitation of the insurer, from the funds or assets
of the insurer, those fees to be class one expenses of administration pursuant to
§ 27-14.3-46.
(d) The rehabilitator may take any action that the rehabilitator deems necessary or appropriate
to reform and revitalize the insurer. The rehabilitator shall have all of the powers
of the directors, officers, and managers, whose authority shall be suspended, except
as they are delegated by the rehabilitator. The rehabilitator shall have full power
to direct and manage, to hire and discharge employees subject to any contract rights
they may have, and to deal with the property and business of the insurer.
(e) If it appears to the rehabilitator that there has been criminal or tortious conduct,
or breach of any contractual or fiduciary obligation detrimental to the insurer by
any officer, manager, agent, insurance producer, broker, employee, or other person,
the rehabilitator may pursue all appropriate legal remedies on behalf of the insurer.
(f) If the rehabilitator determines that reorganization, consolidation, conversion, reinsurance,
merger, or other transformation of the insurer is appropriate, the rehabilitator shall
prepare a plan to effect those changes. Upon application of the rehabilitator for
approval of the plan, and after any notice and hearings as the court may prescribe,
the court may either approve or disapprove the proposed plan, or may modify it and
approve it as modified. Any plan approved under this section shall be, in the judgment
of the court, fair and equitable to all parties concerned. If the plan is approved,
the rehabilitator shall carry out the plan. In the case of a life insurer, the proposed
plan may include the imposition of liens upon the policies of the company, if all
of the rights of the shareholders are first relinquished. A plan for a life insurer
may also propose imposition of a moratorium upon loan and cash surrender rights under
policies for a period and to an extent as may be necessary.
(g) The rehabilitator shall have the power under §§ 27-14.3-30 and 27-14.3-31 to avoid fraudulent transfers.