§ 27-14.3-25. Powers of liquidator.
(a) The liquidator shall have the power:
(1) To appoint a special deputy or deputies to act for the liquidator under this chapter,
and to determine his or her reasonable compensation. The special deputy shall have
all of the powers of the liquidator granted by this section. The special deputy shall
serve at the pleasure of the liquidator;
(2) To employ employees and agents, legal counsel, actuaries, accountants, appraisers,
consultants, and any other personnel as the liquidator may deem necessary to assist
in the liquidation;
(3) To appoint, with the approval of the court, an advisory committee of policyholders,
claimants, or other creditors including guaranty associations should a 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 liquidation, 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 liquidation proceedings conducted
under this chapter;
(4) To fix the reasonable compensation of employees and agents, legal counsel, actuaries,
accountants, appraisers, and consultants with the approval of the court and may reimburse
from the assets of the insurer the division of insurance and its agents and consultants
at the statutory examination rate and/or reasonable agents' or consultants' rates
for reasonable costs incurred in the examination and investigation in anticipation
of liquidation, and in the liquidation of the insurer, those fees are to be Class
1 expenses of administration pursuant to § 27-14.3-46;
(5) To pay reasonable compensation to persons appointed and to defray from the funds or
assets of the insurer all of the expenses of taking possession of, conserving, conducting,
liquidating, disposing of, or 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 incurred costs, the commissioner may advance the incurred
costs out of any appropriation for the maintenance of the insurance department. Any
advanced amounts for the expenses of administration shall be repaid to the commissioner
for the use of the insurance department out of the first available moneys of the insurer;
(6) 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
the person's testimony after it has been correctly reduced to writing, and in connection
with this to require the production of any books, papers, records, or other documents
which he or she deems relevant to the inquiry;
(7) To audit the books and records of all agents or insurance producers of the insurer
insofar as those records relate to the business activities of the insurer;
(8) To collect all debts and moneys due and claims belonging to the insurer, wherever
located, and for this purpose:
(i) To institute timely action in other jurisdictions in order to forestall garnishment
and attachment proceedings against the debts;
(ii) To do any 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 the purposes of collection upon any terms and conditions as he or she deems
best; and
(iii) To pursue any creditor's remedies available to enforce his or her claims;
(9) To conduct public and private sales of the property of the insurer;
(10) 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 § 27-14.3-46;
(11) To acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or dispose
of or deal with any property of the insurer at its market value or upon terms and
conditions as are fair and reasonable. He or she shall also have the 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;
(12) 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 funds borrowed may be repaid as an administrative
expense and have priority over any other claims in § 27-14.3-46(a)(1), Class 1, under the priority of distribution;
(13) To enter into any 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;
(14) To continue to prosecute and to institute in the name of the insurer or in his or
her own name any and all suits and other legal proceedings, in this state or another
place, and to abandon the prosecution of claims he or she deems unprofitable to pursue
further. If the insurer is dissolved under § 27-14.3-24, he or she shall have the power to apply to any court in this state or another place
for leave to substitute himself or herself for the insurer as plaintiff;
(15) To prosecute any action which may exist in behalf of the creditors, members, policyholders,
or shareholders of the insurer against any officer or director of the insurer, or
any other person;
(16) To remove any or all records and property of the insurer to the offices of the commissioner
or to any other place as may be convenient for the purposes of efficient and orderly
execution of the liquidation. Guaranty associations and foreign guaranty associations
shall have reasonable access to the records of the insurer as is necessary for them
to carry out their statutory obligations;
(17) To deposit in one or more banks in this state those sums as are required for meeting
current administration expenses and dividend distributions;
(18) To invest all sums not currently needed, unless the court orders otherwise;
(19) To file any necessary documents for record in the office of any recorder of deeds
or record office in this state or another place where property of the insurer is located;
(20) To assert all defenses available to the insurer as against third persons, including
statutes of limitations, statutes of frauds, 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 that
obligation and may defend only in the absence of a defense by the guaranty associations;
(21) To exercise and enforce all of 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 laws and that is not included with §§ 27-14.3-30 — 27-14.3-32;
(22) 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;
(23) 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; and
(24) To exercise all of the powers now held or after this conferred upon receivers by the
laws of this state not inconsistent with the provisions of this chapter.
(b) The enumeration in this section of the powers and authority of the liquidator shall
not be construed as a limitation upon the liquidator, nor shall it exclude in any
manner the liquidator's right to do any other acts not specifically enumerated or
provided for in this section as may be necessary or appropriate for the accomplishment
of or in aid of the purpose of liquidation.
(c) Notwithstanding the powers of the liquidator as stated in subsections (a) and (b)
of this section, the liquidator shall have no obligation to defend claims or to continue
to defend claims subsequent to the entry of a liquidation order.