§ 27-34.3-14. Miscellaneous provisions.
(a) This chapter shall not be construed to reduce the liability for unpaid assessments
of the insureds of an impaired or insolvent insurer operating under a plan with assessment
liability.
(b) Records shall be kept of all meetings of the board of directors to discuss the activities
of the association in carrying out its powers and duties under § 27-34.3-8. The records of the association with respect to an impaired or insolvent insurer
shall not be disclosed prior to the termination of a liquidation, rehabilitation,
or conservation proceeding involving the impaired or insolvent insurer, upon the termination
of the impairment or insolvency of the insurer, or upon the order of a court of competent
jurisdiction. Nothing in this subsection shall limit the duty of the association to
render a report of its activities under § 27-34.3-15.
(c) For the purpose of carrying out its obligations under this chapter, the association
shall be deemed to be a creditor of the impaired or insolvent insurer to the extent
of assets attributable to covered policies reduced by any amounts to which the association
is entitled as subrogee pursuant to § 27-34.3-8(k). Assets of the impaired or insolvent insurer attributable to covered policies shall
be used to continue all covered policies and pay all contractual obligations of the
impaired or insolvent insurer as required by this chapter. Assets attributable to
covered policies, as used in this subsection, are that proportion of the assets which
the reserves that should have been established for covered policies bear to the reserves
that should have been established for all policies of insurance written by the impaired
or insolvent insurer.
(d) As a creditor of the impaired or insolvent insurer as established in subsection (c)
of this section and consistent with § 27-14.3-38, the association and other similar associations shall be entitled to receive a disbursement
of assets out of the marshalled assets, from time to time as the assets become available
to reimburse it, as a credit against contractual obligations under this chapter. If
the liquidator has not, within one hundred twenty (120) days of a final determination
of insolvency of an insurer by the receivership court, made an application to the
court for the approval of a proposal to disperse assets out of marshalled assets to
guaranty associations having obligations because of the insolvency, then the association
shall be entitled to make application to the receivership court for approval of its
own proposal to disburse these assets.
(e)(1) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding,
the court may take into consideration the contributions of the respective parties,
including the association, the shareholders, and policy owners of the insolvent insurer,
and any other party with a bona fide interest, in making an equitable distribution
of the ownership rights of the insolvent insurer. In that determination, consideration
shall be given to the welfare of the policy owners of the continuing or successor
insurer.
(2) No distribution to stockholders, if any, of an impaired or insolvent insurer shall
be made until and unless the total amount of valid claims of the association with
interest on the claims for funds expended in carrying out its powers and duties under
§ 27-34.3-8 with respect to the insurer have been fully recovered by the association.
(f)(1) If an order for liquidation or rehabilitation of an insurer domiciled in this state
has been entered, the receiver appointed under the order shall have a right to recover
on behalf of the insurer, from any affiliate that controlled it, the amount of distributions,
other than stock dividends paid by the insurer on its capital stock, made at any time
during the five (5) years preceding the petition for liquidation or rehabilitation
subject to the limitations of subsections (f)(2) — (f)(4) of this section.
(2) No distribution shall be recoverable if the insurer 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 who was an affiliate that controlled the insurer at the time the distributions
were paid shall be liable up to the amount of distributions received. Any person who
was an affiliate who controlled the insurer at the time the distributions were declared,
shall be liable up to the amount of distributions which would have been received if
they had been paid immediately. If two (2) or more persons are liable with respect
to the same distributions, they shall be jointly and severally liable.
(4) The maximum amount recoverable under this subsection (f) shall be the amount needed
in excess of all other available assets of the insolvent insurer to pay the contractual
obligations of the insolvent insurer.
(5) If any person liable under subsection (f)(3) of this section is insolvent, all its
affiliates that controlled it at the time the distribution was paid, shall be jointly
and severally liable for any resulting deficiency in the amount recovered from the
insolvent affiliate.