The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 145 : Supervision, Rehabilitation, and Liquidation of Insurers

Subchapter 003 : FORMAL PROCEEDINGS

• § 7060. Powers of liquidator

  (a) The liquidator shall have the power to:

  (1) Appoint a special deputy to act for him or her and to determine reasonable compensation for the special deputy. The special deputy shall have all powers of the liquidator granted by this section. The special deputy shall serve at the pleasure of the liquidator.

  (2) Employ employees and agents, legal counsel, actuaries, accountants, appraisers, consultants, and such other personnel as he or she may deem necessary to assist in the liquidation.

  (3) Fix the reasonable compensation of employees and agents, legal counsel, actuaries, accountants, appraisers, and consultants with the approval of the court.

  (4) Pay reasonable compensation to persons appointed and to defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. 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 costs so incurred out of any appropriation for the maintenance of the Department. Any amounts so advanced for expenses of administration shall be repaid to the Commissioner for the use of the Department out of the first available moneys of the insurer.

  (5) Hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine any person under oath, and compel any person to subscribe to testimony after it has been correctly reduced to writing; and in connection with such proceedings, require the production of any books, papers, records, or other documents that he or she deems relevant to the inquiry.

  (6) Audit the books and records of all agents of the insurer insofar as those records relate to the business activities of the insurer.

  (7) Collect all debts and moneys due and claims belonging to the insurer, wherever located, and for this purpose:

  (A) institute timely action in other jurisdictions, in order to forestall garnishment and attachment proceedings against such debts;

  (B) do such other acts as are necessary or expedient to collect, conserve, or protect its assets or property, including the power to sell, compound, compromise, or assign debts for purposes of collection upon such terms and conditions as he or she deems best; and

  (C) pursue any creditor’s remedies available to enforce his or her claims.

  (8) Conduct public and private sales of the property of the insurer.

  (9) Use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under section 7081 of this title.

  (10) Acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with, any property of the insurer at its market value or upon such terms and conditions as are fair and reasonable. He or she shall also have power to execute, acknowledge, and deliver any and all deeds, assignments, releases, and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation.

  (11) Borrow money on the security of the insurer’s assets or without security and execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation. Any such funds borrowed may be repaid as an administrative expense and have priority over any other claims in Class 1 of section 7081 of this title under the priority of distribution.

  (12) Enter into such contracts as are necessary to carry out the order to liquidate, and affirm or disavow any contracts to which the insurer is a party.

  (13) Continue to prosecute and institute in the name of the insurer or in his or her own name any and all suits and other legal proceedings, in this State or elsewhere, and abandon the prosecution of claims he or she deems unprofitable to pursue further. If the insurer is dissolved under section 7059 of this title, he or she shall have the power to apply to any court in this State or elsewhere for leave to substitute himself or herself for the insurer as plaintiff.

  (14) Prosecute any action that may exist in behalf of the creditors, members, policyholders, or shareholders of the insurer against any officer of the insurer, or any other person.

  (15) Remove any or all records and property of the insurer to the offices of the Commissioner or to such other place as may be convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations shall have such reasonable access to the records of the insurer as is necessary for them to carry out their statutory obligations.

  (16) Deposit in one or more banks in this State such sums as are required for meeting current administration expenses.

  (17) Invest all sums not currently needed, unless the court orders otherwise.

  (18) File any necessary documents for record in the office of any recorder of deeds or record office in this State or elsewhere where property of the insurer is located.

  (19) Assert all defenses available to the insurer as against third persons, including statutes of limitation, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed shall not bind the liquidator. Whenever a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to such obligation and may defend only in the absence of a defense by such guaranty associations or if the potential recovery is above the limits covered by the guaranty association or otherwise not covered by such association.

  (20) Exercise and enforce all the rights, remedies, and powers of any creditor, shareholder, policyholder, or member, including any power to avoid any transfer or lien that may be given by the general law and that is not provided by the provisions of sections 7065 through 7067 of this title.

  (21) Intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee, and act as the receiver or trustee whenever the appointment is offered.

  (22) Enter into agreements with any receiver or commissioner of any other state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both states.

  (23) Exercise all powers now held or hereafter conferred upon receivers by the laws of this State not inconsistent with the provisions of this chapter.

  (b)(1) If a company placed in liquidation issued liability policies on a claims’ made basis, which provided an option to purchase an extended period to report claims, then the liquidator may make available to holders of such policies, for a charge, an extended period to report claims as stated herein. The extended reporting period shall be made available only to those insureds who have not secured substitute coverage. The extended period made available by the liquidator shall begin upon termination of any extended period to report claims in the basic policy and shall end at the earlier of the final date for filing of claims in the liquidation proceeding or 18 months from the order of liquidation.

  (2) The extended period to report claims made available by the liquidator shall be subject to the terms of the policy to which it relates. The liquidator shall make available such extended period within 60 days after the order of liquidation at a charge to be determined by the liquidator subject to approval of the court. Such offer shall be deemed rejected unless it is accepted in writing and the charge is paid within 90 days after the order of liquidation. No commissions, premium taxes, assessments, or other fees shall be due on the charge pertaining to the extended period to report claims.

  (c) The enumeration, in this section, of the powers and authority of the liquidator shall not be construed as a limitation upon him or her, nor shall it exclude in any manner the liquidator’s right to do such other acts not herein specifically enumerated or otherwise provided for, as may be necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation.

  (d) Notwithstanding the powers of the liquidator as stated in subsections (a) and (b) of this section, the liquidator shall have no obligation to defend claims or to continue to defend claims subsequent to the entry of a liquidation order. (Added 1991, No. 45, § 2, eff. May 29, 1991.)