(1) Notwithstanding the entry of a liquidation order, the liquidator may apply for an order to sell or dissolve the corporate entity or charter of a domestic insurer, or the United States branch of an alien insurer domiciled in this state:

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Terms Used In Utah Code 31A-27a-404

  • alien insurer: means an insurer incorporated or organized under the laws of a jurisdiction that is not a state. See Utah Code 31A-27a-102
  • Application: means a document:
         (10)(a)
              (10)(a)(i) completed by an applicant to provide information about the risk to be insured; and
              (10)(a)(ii) that contains information that is used by the insurer to evaluate risk and decide whether to:
                   (10)(a)(ii)(A) insure the risk under:
                        (10)(a)(ii)(A)(I) the coverage as originally offered; or
                        (10)(a)(ii)(A)(II) a modification of the coverage as originally offered; or
                   (10)(a)(ii)(B) decline to insure the risk; or
         (10)(b) used by the insurer to gather information from the applicant before issuance of an annuity contract. See Utah Code 31A-1-301
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Control: is a s defined in Section 31A-1-301. See Utah Code 31A-27a-102
  • Domestic insurer: means an insurer organized under the laws of this state. See Utah Code 31A-1-301
  • domiciliary state: means the state in which an insurer is incorporated or organized, except that "domiciliary state" means:
         (12)(a) in the case of an alien insurer, its state of entry; or
         (12)(b) in the case of a risk retention group, the state in which the risk retention group is chartered as contemplated in the Liability Risk Retention Act, Utah Code 31A-27a-102
  • General assets: includes the property of the estate or its proceeds in excess of the amount necessary to discharge a claim described in Subsection (18)(a). See Utah Code 31A-27a-102
  • insolvent: means that an insurer:
         (22)(a) is unable to pay its obligations when they are due;
         (22)(b) does not have admitted assets at least equal to all of its liabilities; or
         (22)(c) has a total adjusted capital that is less than its mandatory control level RBC, as defined in Section 31A-17-601. See Utah Code 31A-27a-102
  • Insurance: includes :
              (96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
              (96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
              (96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
  • insurer: means a person who:
         (23)(a) is doing, has done, purports to do, or is licensed to do the business of insurance;
         (23)(b) is or has been subject to the authority of, or to rehabilitation, liquidation, reorganization, supervision, or conservation by an insurance commissioner; or
         (23)(c) is included under Section 31A-27a-104. See Utah Code 31A-27a-102
  • Order: means an order of the commissioner. See Utah Code 31A-1-301
  • property of the estate: includes :
         (30)(a) a right, title, or interest of the insurer in property:
              (30)(a)(i) whether:
                   (30)(a)(i)(A) legal or equitable;
                   (30)(a)(i)(B) tangible or intangible; or
                   (30)(a)(i)(C) choate or inchoate; and
              (30)(a)(ii) including choses in action, contract rights, and any other interest recognized under the laws of this state;
         (30)(b) entitlements that exist before the entry of an order of rehabilitation or liquidation;
         (30)(c) entitlements that may arise by operation of this chapter or other provisions of law allowing the receiver to avoid prior transfers or assert other rights; and
         (30)(d)
              (30)(d)(i) records or data that is otherwise the property of the insurer; and
              (30)(d)(ii) records or data similar to those described in Subsection (30)(d)(i) that are within the possession, custody, or control of a managing general agent, a third party administrator, a management company, a data processing company, an accountant, an attorney, an affiliate, or other person. See Utah Code 31A-27a-102
  • receivership: means a rehabilitation, liquidation, or ancillary receivership. See Utah Code 31A-27a-102
  • receivership court: refers to the court in which a delinquency proceeding is pending. See Utah Code 31A-27a-102
  • Sell: means to exchange a contract of insurance:
         (179)(a) by any means;
         (179)(b) for money or its equivalent; and
         (179)(c) on behalf of an insurance company. See Utah Code 31A-1-301
  • State: means a state, district, or territory of the United States. See Utah Code 31A-27a-102
  • United States: includes each state, district, and territory of the United States of America. See Utah Code 68-3-12.5
     (1)(a) at any time after an order of liquidation of the insurer is granted; and
     (1)(b) consistent with this section.
(2) Upon an application to sell the corporate entity or charter, with notice as prescribed in this chapter, the receivership court may enter an order:

     (2)(a) separating the corporate entity or charter, together with any of its licenses to do business and the assets the liquidator considers appropriate to the transaction, from:

          (2)(a)(i) the remaining estate in liquidation;
          (2)(a)(ii) all of the remaining estate’s assets; and
          (2)(a)(iii) the claims or interests of all claimants, creditors, policyholders, and stockholders;
     (2)(b) canceling all outstanding stock and other securities of, and other equity interests in, the corporate entity or charter, except that the cancellation may not affect any claim against the estate by holders of the equity interests;
     (2)(c) authorizing the issuance and sale of new stock or other securities for the purpose of transferring to one or more buyers control and ownership of the corporate entity or charter; and
     (2)(d) authorizing the sale of the corporate entity or charter, together with any of its licenses to do business and the general assets the liquidator considers appropriate to the transaction, free and clear from the claims or interests of all claimants, creditors, policyholders, and stockholders.
(3)

     (3)(a) The sale of the corporate entity or charter may be made in the manner and on the terms and conditions:

          (3)(a)(i) applied for by the liquidator; and
          (3)(a)(ii) ordered by the receivership court.
     (3)(b) A sale is subject to the domiciliary state‘s laws regarding acquisition of an insurer under Chapter 16, Insurance Holding Companies.
     (3)(c) Upon the sale of a corporate entity or chapter:

          (3)(c)(i) the proceeds from the sale become a part of the property of the estate in liquidation; and
          (3)(c)(ii) the then separate corporate entity or charter, together with any of its licenses to do business and the assets the liquidator considers appropriate to the transaction, is free and clear from the claims or interests of all claimants, creditors, policyholders, and stockholders of the insurer in liquidation.
     (3)(d) The court has broad powers to effect the disposition of a corporate entity and its charter including, without limiting the statement of broad powers, a reorganization or conversion of the corporate entity.
(4) This section shall be liberally construed to:

     (4)(a) accomplish its purposes to provide an expeditious and effective procedure to realize the maximum proceeds possible from the sale of a corporate entity or charter separated from an estate in liquidation; and
     (4)(b) ensure that a purchaser receives clear and marketable title.
(5) If permission to sell the corporate entity or charter is not granted before discharge of the liquidator, in accordance with this section or otherwise with receivership court approval:

     (5)(a) the receivership court may order dissolution of the corporate entity or charter;
     (5)(b) dissolution is considered complete by operation of law upon the discharge of the liquidator if the insurer is insolvent; or
     (5)(c) dissolution may be ordered by the receivership court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason.
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