Connecticut General Statutes 38a-920 – Liquidation orders. Financial reports: Contents and filings. Handling of claim obligations. Appointment of judge to supervise liquidation. Preference of claims. Appeals
(a) An order to liquidate the business of a domestic insurer shall appoint the commissioner and his successors in office as liquidator and shall direct the liquidator to take possession of the assets of the insurer and to administer them under the general supervision of the court. The commissioner shall be entitled to request the administrative judge of the superior court for the judicial district of Hartford to appoint a single judge to supervise the liquidation and hear any cases or controversies arising out of or related to the liquidation. Liquidation proceedings shall be exempt from any dormancy or similar program maintained by the court for the early closure of civil actions. The liquidator shall be vested by operation of law with the title to all of the property, contracts, and rights of action and all of the books and records of the insurer ordered liquidated, wherever located, as of the entry of the final order of liquidation. The filing or recording of the order with the clerk of the Superior Court and with the recorder of deeds of the town in which its principal office or place of business is located, or, in the case of real estate with the recorder of deeds of the town where the property is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds would have imparted.
Terms Used In Connecticut General Statutes 38a-920
- Alien insurer: means any insurer that has been chartered by or organized or constituted within or under the laws of any jurisdiction or country without the United States. See Connecticut General Statutes 38a-1
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commissioner: means the Insurance Commissioner. See Connecticut General Statutes 38a-1
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Domestic insurer: means any insurer that has been chartered by, incorporated, organized or constituted within or under the laws of this state. See Connecticut General Statutes 38a-1
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Insurance: means any agreement to pay a sum of money, provide services or any other thing of value on the happening of a particular event or contingency or to provide indemnity for loss in respect to a specified subject by specified perils in return for a consideration. See Connecticut General Statutes 38a-1
- Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy. See Connecticut General Statutes 38a-1
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- liabilities: shall include but not be limited to reserves required by statute or by regulations adopted by the commissioner in accordance with the provisions of chapter 54 or specific requirements imposed by the commissioner upon a subject company at the time of admission or subsequent thereto. See Connecticut General Statutes 38a-1
- Policy: means any document, including attached endorsements and riders, purporting to be an enforceable contract, which memorializes in writing some or all of the terms of an insurance contract. See Connecticut General Statutes 38a-1
- State: means any state, district, or territory of the United States. See Connecticut General Statutes 38a-1
- United States: means the United States of America, its territories and possessions, the Commonwealth of Puerto Rico and the District of Columbia. See Connecticut General Statutes 38a-1
(b) Upon issuance of the order, the rights and liabilities of any such insurer and of its creditors, policyholders, shareholders, members and all other persons interested in its estate shall become fixed as of the date of entry of the order of liquidation, except as provided in sections 38a-921 and 38a-939 unless otherwise fixed by the Superior Court.
(c) An order to liquidate the business of an alien insurer domiciled in this state shall be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the business in the United States shall be the only assets and business included therein.
(d) At the time of petitioning for an order of liquidation, or at any time thereafter, the commissioner, after making appropriate findings of an insurer’s insolvency, may petition the court for a judicial declaration of such insolvency. After providing such notice and hearing as it deems proper the court may make the declaration.
(e) Any order issued under this section shall require the liquidator to submit financial reports to the court. Financial reports shall include, at a minimum, a statement of the assets and liabilities of the insurer and all funds received or disbursed by the liquidator during the current period. Financial reports shall be filed within one year of the liquidation order and at least annually thereafter.
(f) (1) Not later than five days after the initiation of an appeal of an order of liquidation, which order has not been stayed, the commissioner shall present for the court’s approval a plan for the continued performance of the defendant company’s policy claim obligations, including the duty to defend the insured under liability insurance policies, during the pendency of an appeal. Such plan shall provide for the continued performance and payment of policy claim obligations in the normal course of events, notwithstanding the grounds alleged in support of the order of liquidation including the ground of insolvency. In the event the defendant company’s financial condition will not, in the judgment of the commissioner, support the full performance of all policy claim obligations during the appeal pendency period, the plan may prefer the claims of certain policyholders and claimants over creditors and interested parties as well as other policyholders and claimants, as the commissioner finds to be fair and equitable considering the relative circumstances of such policyholders and claimants. The court shall examine the plan submitted by the commissioner and if it finds the plan to be in the best interests of the parties, the court shall approve the plan. No action shall lie against the commissioner or any of his deputies, agents, clerks, assistants or attorneys by any party based on preference in an appeal pendency plan approved by the court.
(2) The appeal pendency plan shall not supersede or affect the obligations of any insurance guaranty association.
(3) Any such plans shall provide for equitable adjustments to be made by the liquidator to any distributions of assets to guaranty associations, in the event that the liquidator pays claims from assets of the estate, which would otherwise be the obligations of any particular guaranty association but for the appeal of the order of liquidation, such that all guaranty associations equally benefit on a pro rata basis from the assets of the estate. In the event an order of liquidation is set aside upon any appeal, the company shall not be released from delinquency proceedings unless and until funds advanced by any guaranty association, including reasonable administrative expenses in connection therewith relating to obligations of the company, shall be repaid in full, together with interest at the judgment rate of interest or unless an arrangement for repayment thereof has been made with the consent of all applicable guaranty associations.