§ 7053. Powers and duties of the rehabilitator
(a) The Commissioner as rehabilitator may appoint one or more special deputies, who shall
have all the powers and responsibilities of the rehabilitator granted under this section,
and the Commissioner may employ such counsel, clerks, assistants, and other personnel
as deemed necessary. The compensation of the special deputy, counsel, clerks, and
assistants and all 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. In the event
that the property of the insurer does not contain sufficient cash or liquid assets
to defray the administrative costs incurred, the Commissioner may advance the costs
so incurred out of any appropriation for the maintenance of the Department. Amounts
so advanced for expenses of administration shall be repaid to the Commissioner for
the use of the Department out of the first available money of the insurer.
(b) The rehabilitator may take such action as he or she deems necessary or appropriate
to reform and revitalize the insurer. He or she shall have all the powers of the
directors, officers, and managers, whose authority shall be suspended, except as they
are redelegated 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.
(c) 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, broker, employee, or other person, he or she may pursue
all appropriate legal remedies on behalf of the insurer.
(d) 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 such changes. Upon application of the rehabilitator for approval
of the plan, and after such notice and hearings as the court may prescribe, the court
may either approve or disapprove the plan proposed, or may modify it and approve it
as modified. A plan approved under this subsection 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 plan proposed
may include the imposition of liens upon the policies of the company, if all rights
of 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
such period and to such an extent as may be necessary.
(e) The rehabilitator shall have the power under sections 7065 and 7066 of this title to avoid fraudulent transfers. (Added 1991, No. 45, § 2, eff. May 29, 1991.)