§ 7057. Liquidation orders
(a) An order to liquidate the business of a domestic insurer shall appoint the Commissioner
and the Commissioner’s successors in office liquidator and shall direct the liquidator
immediately to take possession of the assets of the insurer and to administer them
under the general supervision of the court. The liquidator shall be vested by operation
of law with the title to all the property, contracts, and rights of action, and all
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 Superior Court of Washington County or the town clerk of the town in which its
principal office or place of business is located or, in the case of real estate, with
the town clerk 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
town clerk would have imparted.
(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 7058 and 7076 of this title.
(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 of the U.S. branch of the alien insurer shall be the
only assets and business included in the order.
(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 accounting to the court by the liquidator.
Accountings shall include (at a minimum) the assets and liabilities of the insurer
and all funds received or disbursed by the liquidator during the current period.
Accountings shall be filed within one year of the liquidation order and at least annually
thereafter.
(f)(1) No order of liquidation shall be stayed pending appeal unless the persons challenging
the order of liquidation on appeal post a bond satisfactory to cover all legal costs
of defending the appeal and all loss and expense costs to the estate attributable
to the delay by reason of the stay pending appeal.
(2) 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 all 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. (Added 1991, No. 45, § 2, eff. May 29, 1991; amended 2021, No. 105 (Adj. Sess.), § 254, eff. July 1, 2022.)