(a)  The commissioner as rehabilitator may appoint one or more special deputies who shall have all of the powers and responsibilities of the rehabilitator granted under this section, and the commissioner may employ counsel, clerks and assistants as necessary. The compensation of the special deputy, counsel, clerks, and assistants and all of the expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the commissioner, with the approval of the court, and shall be paid out of the funds or assets of the insurer. The persons appointed under this section shall serve at the pleasure of the commissioner. The commissioner, as rehabilitator, may, with the approval of the court, appoint an advisory committee of policyholders, claimants, or other creditors including guaranty associations should an advisory 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 rehabilitation, 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 rehabilitation proceedings conducted under this chapter.

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Terms Used In Rhode Island General Laws 27-14.3-18

  • Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Contract: A legal written agreement that becomes binding when signed.
  • 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.
  • 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
  • Fiduciary: A trustee, executor, or administrator.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6

(b)  In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the commissioner may advance the incurred costs out of any appropriation for the maintenance of the division of insurance. Any advanced amounts for expenses of administration shall be repaid to the commissioner for the use of the insurance department out of the first available money of the insurer.

(c)  The commissioner may reimburse the division of insurance and its agents and consultants at its statutory examination rate and/or reasonable consultants’ rate for reasonable costs incurred in the examination and the investigation in anticipation of the rehabilitation of the insurer and in the rehabilitation of the insurer, from the funds or assets of the insurer, those fees to be class one expenses of administration pursuant to § 27-14.3-46.

(d)  The rehabilitator may take any action that he or she deems necessary or appropriate to reform and revitalize the insurer. He or she shall have all of the powers of the directors, officers, and managers, whose authority shall be suspended, except as they are delegated by the rehabilitator. He or she shall have full power to direct and manage, to hire and discharge employees subject to any contract rights they may have, and to deal with the property and business of the insurer.

(e)  If it appears to the rehabilitator that there has been criminal or tortious conduct, or breach of any contractual or fiduciary obligation detrimental to the insurer by any officer, manager, agent, insurance producer, broker, employee, or other person, he or she may pursue all appropriate legal remedies on behalf of the insurer.

(f)  If the rehabilitator determines that reorganization, consolidation, conversion, reinsurance, merger, or other transformation of the insurer is appropriate, he or she shall prepare a plan to effect those changes. Upon application of the rehabilitator for approval of the plan, and after any notice and hearings as the court may prescribe, the court may either approve or disapprove the proposed plan, or may modify it and approve it as modified. Any plan approved under this section shall be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the rehabilitator shall carry out the plan. In the case of a life insurer, the proposed plan may include the imposition of liens upon the policies of the company, if all of the rights of the shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies for a period and to an extent as may be necessary.

(g)  The rehabilitator shall have the power under § 27-14.3-30 and § 27-14.3-31 to avoid fraudulent transfers.

History of Section.
P.L. 1993, ch. 248, § 1.