Utah Code 31A-27a-405. Powers of the liquidator
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(1) The liquidator may:
Terms Used In Utah Code 31A-27a-405
- Affected guaranty association: means a guaranty association that is or may become liable for payment of a covered claim. See Utah Code 31A-27a-102
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Commissioner: is a s defined in Section 31A-1-301. See Utah Code 31A-27a-102
- Contract: A legal written agreement that becomes binding when signed.
- creditor: means a person having a claim against an insurer whether the claim is:(5)(a) matured or not matured;(5)(b) liquidated or unliquidated;(5)(c) secured or unsecured;(5)(d) absolute; or(5)(e) fixed or contingent. See Utah Code 31A-27a-102
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Filed: means that a filing is:
(69)(a)(i) submitted to the department as required by and in accordance with applicable statute, rule, or filing order;(69)(a)(ii) received by the department within the time period provided in applicable statute, rule, or filing order; and(69)(a)(iii) accompanied by the appropriate fee in accordance with:(69)(a)(iii)(A) Section31A-3-103 ; or(69)(a)(iii)(B) rule. See Utah Code 31A-1-301- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Guaranty association: means :
(20)(a) a mechanism mandated by Chapter 28, Guaranty Associations; or(20)(b) a similar mechanism in another state that is created for the payment of claims or continuation of policy obligations of a financially impaired or insolvent insurer. See Utah Code 31A-27a-102- Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy and includes:
(103)(a)(i) a policyholder;(103)(a)(ii) a subscriber;(103)(a)(iii) a member; and(103)(a)(iv) a beneficiary. 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- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
- 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.
- Order: means an order of the commissioner. See Utah Code 31A-1-301
- Person: includes :
(146)(a) an individual;(146)(b) a partnership;(146)(c) a corporation;(146)(d) an incorporated or unincorporated association;(146)(e) a joint stock company;(146)(f) a trust;(146)(g) a limited liability company;(146)(h) a reciprocal;(146)(i) a syndicate; or(146)(j) another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301- Policy: includes all clauses, riders, endorsements, and papers that are a part of a policy. See Utah Code 31A-27a-102
- Policyholder: means a person who controls a policy, binder, or oral contract by ownership, premium payment, or otherwise. See Utah Code 31A-1-301
- Proceeding: includes an action or special statutory proceeding. See Utah Code 31A-1-301
- Property: includes both real and personal property. See Utah Code 68-3-12.5
- 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- Prosecute: To charge someone with a crime. A prosecutor tries a criminal case on behalf of the government.
- receiver: means the commissioner or the commissioner's designee, including a rehabilitator, liquidator, or ancillary receiver. 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
- Record: when used as a noun, means information or data, in whatever form maintained, including:
(36)(a) a book;(36)(b) a document;(36)(c) a paper;(36)(d) a file;(36)(e) an application file;(36)(f) a policyholder list;(36)(g) policy information;(36)(h) a claim or claim file;(36)(i) an account;(36)(j) a voucher;(36)(k) a litigation file;(36)(l) a premium record;(36)(m) a rate book;(36)(n) an underwriting manual;(36)(o) a personnel record;(36)(p) a financial record; or(36)(q) other material. See Utah Code 31A-27a-102- Reinsurance: means a transaction or contract under which an assuming insurer agrees to indemnify a ceding insurer against all, or a part, of a loss that the ceding insurer may sustain under the one or more policies that the ceding insurer issues or will issue. See Utah Code 31A-27a-102
- Reinsurer: means a person licensed in this state as an insurer with the authority to assume reinsurance. See Utah Code 31A-1-301
- Security: means a:
(176)(a)(i) note;(176)(a)(ii) stock;(176)(a)(iii) bond;(176)(a)(iv) debenture;(176)(a)(v) evidence of indebtedness;(176)(a)(vi) certificate of interest or participation in a profit-sharing agreement;(176)(a)(vii) collateral-trust certificate;(176)(a)(viii) preorganization certificate or subscription;(176)(a)(ix) transferable share;(176)(a)(x) investment contract;(176)(a)(xi) voting trust certificate;(176)(a)(xii) certificate of deposit for a security;(176)(a)(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease;(176)(a)(xiv) commodity contract or commodity option;(176)(a)(xv) certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in Subsections (176)(a)(i) through (xiv); or(176)(a)(xvi) another interest or instrument commonly known as a security. See Utah Code 31A-1-301- 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- 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.
- State: means a state, district, or territory of the United States. See Utah Code 31A-27a-102
- Statute: A law passed by a legislature.
- Subpoena: A command to a witness to appear and give testimony.
- Testimony: Evidence presented orally by witnesses during trials or before grand juries.
- Transfer: includes the sale and every other and different mode of disposing of or parting with property or with an interest in property, whether:
(46)(a)(i) directly or indirectly;(46)(a)(ii) absolutely or conditionally;(46)(a)(iii) voluntarily or involuntarily; or(46)(a)(iv) by or without judicial proceedings. See Utah Code 31A-27a-102- Trustee: means "director" when referring to the board of directors of a corporation. See Utah Code 31A-1-301
- Trustee: A person or institution holding and administering property in trust.
- Usury: Charging an illegally high interest rate on a loan. Source: OCC
- Writing: includes :
(48)(a) printing;(48)(b) handwriting; and(48)(c) information stored in an electronic or other medium if the information is retrievable in a perceivable format. See Utah Code 68-3-12.5(1)(a)(1)(a)(i) hold hearings, subpoena a witness to compel the witness’ attendance, administer oaths, examine a person under oath, and compel a person to subscribe to that person’s testimony after the testimony is correctly reduced to writing; and(1)(a)(ii) in connection with a power listed in Subsection (1)(a)(i), require the production of a record that the liquidator considers relevant to the inquiry;(1)(b) audit the records of all agents of the insurer to the extent that those records relate to the business activities of the insurer;(1)(c) collect all debts and money due and claims belonging to the insurer, wherever located, and for this purpose to:(1)(c)(i) institute action in another jurisdiction, to forestall garnishment and attachment proceedings against the debt;(1)(c)(ii) in addition to paying other Class 1 claims described in Subsection 31A-27a-701(2)(a), if the payment assists or results in the collection or recovery of property of the insurer that provides a net benefit to creditors of the estate, pay Class 1 administrative costs of the estate:(1)(c)(ii)(A) upon approval of the receivership court; and(1)(c)(ii)(B) only to the extent of the collection or recovery of the property;(1)(c)(iii) do any other act as is necessary or expedient to collect, conserve, or protect the insurer’s property, including the power to sell, compound, compromise, or assign a debt for purposes of collection upon the terms and conditions that the liquidator considers consistent with this chapter; and(1)(c)(iv) pursue any creditor‘s remedies available to enforce a claim of the insurer;(1)(d) conduct public and private sales of the property of the insurer;(1)(e) subject to Subsection (6), use property of the estate of an insurer under a liquidation order to transfer:(1)(e)(i)(1)(e)(i)(A) a policy obligation; or(1)(e)(i)(B)(1)(e)(i)(B)(I) the insurer’s obligations under a surety bond or a surety undertaking; and(1)(e)(i)(B)(II) collateral held by the insurer with respect to the reimbursement obligations of the principals under the surety bond or surety undertaking;(1)(e)(ii) to a solvent assuming insurer; and(1)(e)(iii) if the transfer can be arranged without prejudice to applicable priorities under Section 31A-27a-701;(1)(f) subject to Subsection (4), acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with, any property of the estate:(1)(f)(i) at its market value; or(1)(f)(ii) upon terms and conditions that are fair and reasonable;(1)(g) execute, acknowledge, and deliver any deed, assignment, release, or other instrument necessary or proper to effectuate a sale of property or other transaction in connection with the liquidation;(1)(h)(1)(h)(i) subject to Subsection (7), borrow money for the purpose of facilitating the liquidation:(1)(h)(i)(A) on the security of the property of the estate; or(1)(h)(i)(B) without security; and(1)(h)(ii) execute and deliver a document necessary to the transaction to borrow money;(1)(i)(1)(i)(i) enter into a contract necessary to carry out the order to liquidate; and(1)(i)(ii) subject to Section 31A-27a-113, assume or reject an executory contract or unexpired lease to which the insurer is a party;(1)(j)(1)(j)(i) continue to prosecute or to institute in the name of the insurer or in the liquidator’s own name a suit or other legal proceeding, in this state or elsewhere; and(1)(j)(ii) abandon the prosecution of a claim the liquidator considers unprofitable to pursue further;(1)(k) if the insurer is dissolved under Section 31A-27a-404, apply to a court in this state or elsewhere for leave to substitute the liquidator for the insurer as a party;(1)(l) subject to Subsection (8), prosecute or assert with exclusive standing an action that may exist on behalf of the public or a creditor, member, policyholder, or shareholder of the insurer against a person, except to the extent that:(1)(l)(i) a claim is personal to a specific creditor, member, policyholder, or shareholder; and(1)(l)(ii) recovery on the claim would not inure to the benefit of the estate;(1)(m) subject to Subsection (8), take possession of a record or property of the insurer as may be convenient for the purposes of efficient and orderly execution of the liquidation;(1)(n) deposit in one or more banks in this state sums required for meeting current administration expenses and dividend distributions;(1)(o) invest all sums not currently needed, unless the receivership court orders otherwise;(1)(p) file any necessary document for record in the office of a recorder of deeds or record office in this state or elsewhere where property of the insurer is located;(1)(q) subject to Subsection (9), assert all defenses available to the insurer as against a third person, including statutes of limitations, statutes of frauds, and the defense of usury;(1)(r) exercise and enforce all the rights, remedies, and powers of a creditor, shareholder, policyholder, or member, including any power to avoid a transfer or lien that may be voidable under this chapter or otherwise;(1)(s)(1)(s)(i) intervene in a proceeding wherever instituted that might lead to the appointment of a receiver or trustee for the insurer or any of its property; and(1)(s)(ii) act as the receiver or trustee whenever the appointment is offered;(1)(t) enter into an agreement with a receiver or commissioner of any other state; and(1)(u) exercise all powers held on or conferred after April 30, 2007, on a receiver by the laws of this state not inconsistent with this chapter.(2) The liquidator is vested with all the rights of the one or more entities in receivership.(3) The enumeration of the powers and authority of the liquidator in this section:(3)(a) may not be construed as a limitation upon the liquidator; and(3)(b) does not exclude in any manner the right to do other acts:(3)(b)(i) not specifically enumerated or otherwise provided for; and(3)(b)(ii) to the extent necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation.(4)(4)(a) The liquidator may take the following actions as provided in this Subsection (4):(4)(a)(i) hypothecate, encumber, lease, sell, transfer, abandon, or otherwise dispose of or deal with property of the insurer;(4)(a)(ii) settle or resolve a claim brought by the liquidator on behalf of the insurer; or(4)(a)(iii) commute or settle a claim of reinsurance under a contract of reinsurance.(4)(b) The liquidator may take an action described in Subsection (4)(a) at the liquidator’s discretion if the property or claim has a market or settlement value, as shown on the receivership’s financial statements, that does not exceed:(4)(b)(i) the lesser of:(4)(b)(i)(A) $1,000,000; or(4)(b)(i)(B) 10% of the general assets of the estate; or(4)(b)(ii) an amount increased from the amount described in Subsection (4)(b)(i), if the receivership court increases the amount upon a petition of the liquidator and a showing that compliance with this Subsection (4)(b) is:(4)(b)(ii)(A) burdensome to the liquidator in administering the estate; and(4)(b)(ii)(B) unnecessary to protect the material interests of creditors.(4)(c) In all instances other than those described in Subsection (4)(b), the liquidator may take an action described in Subsection (4)(a) only after obtaining approval of the receivership court as provided in Section 31A-27a-107.(4)(d) The liquidator may, at the liquidator’s discretion, request the receivership court to approve a proposed action as provided in Section 31A-27a-107:(4)(d)(i) if the value of the property or claim appears to be less than the threshold provided in Subsection (4)(b) but cannot be ascertained with certainty; or(4)(d)(ii) for any other reason as determined by the liquidator.(4)(e)(4)(e)(i) After obtaining approval of the receivership court as provided in Section 31A-27a-107, the liquidator may transfer rights to payment under a ceding reinsurance agreement covering policy to a third party transferee.(4)(e)(ii) The transferee has the rights to collect and enforce collection of the reinsurance for the amount payable to the ceding insurer or to its receiver:(4)(e)(ii)(A) without diminution because:(4)(e)(ii)(A)(I) of the insolvency; or(4)(e)(ii)(A)(II) the receiver failed to pay all or a portion of the claim; and(4)(e)(ii)(B) on the basis of the amounts paid or allowed pursuant to Section 31A-27a-511.(4)(e)(iii) The transfer of the rights described in Subsection (4)(e)(ii) does not give rise to any defense regarding the reinsurer‘s obligations under the reinsurance agreement regardless of whether the agreement or other applicable law prohibits the transfer of rights under the reinsurance agreement.(4)(e)(iv) Except as provided in this Subsection (4), a transfer of rights pursuant to this Subsection (4)(e) may not impair any right or defense of the reinsurer that:(4)(e)(iv)(A) exists before the transfer; or(4)(e)(iv)(B) would have existed in the absence of the transfer.(4)(e)(v) Except as otherwise provided in this Subsection (4), a transfer of rights pursuant to this Subsection (4)(e) does not relieve the transferee or the liquidator from an obligation owed to the reinsurer pursuant to the reinsurance or other agreement.(5)(5)(a) The liquidator is not obligated to defend an action against the insurer or insured.(5)(b) If a defense is an obligation of the insurer, an insured not defended by a guaranty association may:(5)(b)(i) provide its own defense; and(5)(b)(ii) include the cost of the defense as part of the insured’s claim.(5)(c) The right of the liquidator to contest coverage on a particular claim is preserved without the necessity for an express reservation of rights.(6) Once a liquidator makes a transfer described in Subsection (1)(e), the estate has no further liability under a transferred policy, surety bond, or surety undertaking after the transfer is made if:(6)(a) all insureds, principals, third party claimants, and obligees under the policy, surety bond, or surety undertaking consent; or(6)(b) the receivership court so orders.(7) Funds borrowed under Subsection (1)(h):(7)(a) may be repaid as an administrative expense; and(7)(b) have priority over any other claims in Class 1 under the priority of distribution.(8)(8)(a) Subsection (1)(l) does not infringe or impair any of the rights provided to an affected guaranty association pursuant to its enabling statute or otherwise.(8)(b) Notwithstanding Subsection (1)(m), an affected guaranty association shall have reasonable access to the records of the insurer necessary for the affected guaranty association to carry out its statutory obligations.(9)(9)(a) A waiver of a defense by the insurer after a petition pursuant to Section 31A-27a-201 or 31A-27a-207 is filed does not bind the liquidator.(9)(b) Notwithstanding Subsection (1)(q), when an affected guaranty association determines it has an obligation to defend a suit, the liquidator:(9)(b)(i) shall defer to that obligation; and(9)(b)(ii) may defend only in cooperation with the affected guaranty association.