(a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order has a right to recover on behalf of the insurer (1) from a parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions, other than a distribution of shares of the same class of stock, paid by the insurer on the insurer’s capital stock; or (2) a payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or the insurer’s subsidiary to a director, officer, or employee. If the distribution or payment is made during the 12 months preceding the petition for liquidation, conservation, or rehabilitation, the distribution or payment is subject to the limitations of (b) – (d) of this section.
lawyer at desk

Ask an insurance law question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

Terms Used In Alaska Statutes 21.78.325

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • person: includes a corporation, company, partnership, firm, association, organization, business trust, or society, as well as a natural person. See Alaska Statutes 01.10.060
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(b) A distribution may not be recovered if the parent or affiliate 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.
(c) A person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time the distribution was paid is liable up to the amount of the distribution or payment that the person received. If two or more persons are liable with respect to the same distribution, the persons are jointly and severally liable.
(d) The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds that expended funds or incurred expenses or may expend funds or may incur expenses in connection with the impaired or insolvent insurer.
(e) To the extent that a person liable under (c) of this section is insolvent or otherwise fails to pay a claim due under (c) of this section, the person’s parent corporation or holding company or person who otherwise controlled the parent corporation or holding company at the time the distribution was paid is jointly and severally liable for the resulting deficiency in the amount recovered from the parent corporation or holding company or the person who otherwise controlled the parent corporation or holding company.
  Previous section
Next section  
 Chapter 78 Contents