This text of Tennessee § 56-11-113 (Order of liquidation or rehabilitation - Recovery by receivers) is published on Counsel Stack Legal Research, covering Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
(a)If an order for liquidation or rehabilitation of a domestic insurer or health maintenance organization has been entered, the receiver appointed under the order shall have a right to recover on behalf of the insurer or health maintenance organization:
(1)From any parent corporation or holding company or person or affiliate who otherwise controlled the insurer or health maintenance organization, the amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer or health maintenance organization on its capital stock; or (2) Any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or health maintenance organization or its subsidiaries to a director, officer or employee, where th
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(a) If an order for liquidation or rehabilitation of a domestic insurer or health maintenance organization has been entered, the receiver appointed under the order shall have a right to recover on behalf of the insurer or health maintenance organization: (1) From any parent corporation or holding company or person or affiliate who otherwise controlled the insurer or health maintenance organization, the amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer or health maintenance organization on its capital stock; or (2) Any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or health maintenance organization or its subsidiaries to a director, officer or employee, where the distribution or payment pursuant to subdivision (a)(1) or (a)(2) is made at any time during the one (1) year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (b)-(d). (b) No such distribution shall be recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable, and that the insurer or health maintenance organization did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer or health maintenance organization to fulfill its contractual obligations. (c) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or health maintenance organization or affiliate at the time the distributions were paid, shall be liable up to the amount of distributions or payments the person received under subsection (a). Any person who otherwise controlled the insurer or health maintenance organization at the time the distributions were declared shall be liable up to the amount of distributions the person would have received had the person been paid immediately. If two (2) or more persons are liable with respect to the same distributions, they shall be jointly and severally liable. (d) The maximum amount recoverable under this section shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer or health maintenance organization to pay the contractual obligations of the impaired or insolvent insurer or health maintenance organization and to reimburse any guaranty funds. (e) To the extent that any person liable under subsection (c) is insolvent or otherwise fails to pay claims due from it pursuant to subsection (c), its parent corporation or holding company or person who otherwise 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 parent corporation or holding company or person who otherwise controlled it.