20-685
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20-685. Powers and duties of the board A. If a domestic insurer is an impaired insurer, the fund may, prior to an order of liquidation or rehabilitation and subject to any conditions imposed by the fund other than those which impair the contractual obligations of the impaired insurer, with the approval of the impaired insurer and the director: 1. Guarantee, assume or reinsure, or cause to be guaranteed, assumed or reinsured, all the policies of the impaired insurer. 2. Provide such monies, pledges, notes, guarantees or other means as are proper to effectuate paragraph 1 of this subsection and assure payment of the contractual obligations of the impaired insurer pending action pursuant to paragraph 1 of this subsection. 3. Loan money to the impaired insurer. B. If a foreign or alien insurer is an impaired insurer, the board may, prior to any order of liquidation, rehabilitation or conservation, with respect to the covered policies of residents and subject to any conditions imposed by the board other than those which impair the contractual obligations of the impaired insurer and with the approval of the impaired insurer and the director: 1. Guarantee, assume or reinsure, or cause to be guaranteed, assumed or reinsured, the impaired insurer's covered policies of residents. 2. Provide such monies, pledges, notes, guarantees or other means as are proper to effectuate paragraph 1 of this subsection and assure payment of the impaired insurer's contractual obligations to residents pending action pursuant to paragraph 1 of this subsection. 3. Loan money to the impaired insurer. C. If a domestic insurer is an impaired insurer under an order of liquidation or rehabilitation, the board shall, subject to the approval of the director: 1. Guarantee, assume or reinsure, or cause to be guaranteed, assumed or reinsured, the covered policies of the impaired insurer. 2. Assure payment of the contractual obligations of the impaired insurer. 3. Provide such monies, pledges, notes, guarantees or other means as are reasonably necessary to discharge such duties. If the board fails to act within a reasonable period of time, the director shall have the powers and duties of the board prescribed pursuant to this article with respect to such domestic impaired insurer. D. If a foreign or alien insurer is an impaired insurer under an order of liquidation, rehabilitation or conservation, the board shall, subject to the approval of the director: 1. Guarantee, assume or reinsure, or cause to be guaranteed, assumed or reinsured, the covered policies of residents. 2. Assure payment of the contractual obligations of the impaired insurer to residents. 3. Provide such monies, pledges, notes, guarantees or other means as are reasonably necessary to discharge such duties. If the board fails to act within a reasonable period of time, the director shall have the powers and duties of the board pursuant to this article with respect to such foreign or alien impaired insurer. E. In carrying out its duties under subsections C and D of this section, the board may request that there be imposed policy or contract liens, moratoriums on payments or other similar means. Such liens, moratoriums or similar means may be imposed if the director: 1. Finds that the amounts which can be assessed pursuant to this article are less than the amounts needed to assure full and prompt performance of the impaired insurer's contractual obligations or that the economic or financial conditions as they affect member insurers are sufficiently adverse to render the imposition of policy or contract liens, moratoriums or similar means to be in the public interest. 2. Approves the specific policy liens, contract liens, moratoriums or similar means to be used. Before being obligated pursuant to subsections C and D of this section the board may request that there be imposed temporary moratoriums or liens on payments of cash values and policy loans and such temporary moratoriums and liens may be imposed if they are approved by the director. F. The board is not liable pursuant to this section for any covered policy of a foreign or alien insurer whose domiciliary jurisdiction or state of entry provides by statute or regulation for residents of this state protection substantially similar to that provided by this article for residents of other states. G. The board may render assistance and advice to the director, upon his or her request, concerning rehabilitation, payment of claims, continuations of coverage or the performance of other contractual obligations of any impaired insurer. H. The board shall have standing to appear before any court in this state with jurisdiction over an impaired insurer concerning which the board is or may become obligated. Such standing shall extend to all matters germane to the powers and duties of the board, including proposals for reinsuring or guaranteeing the covered policies of the impaired insurer and the determination of the covered policies and contractual obligations. I. Any persons receiving benefits shall be deemed to have assigned their rights under the policy to the board to the extent of the benefits received whether the benefits are payments of contractual obligations or continuation of coverage. The board may require an assignment to the board of such rights by any payee, policy or contract owner, beneficiary, insured or annuitant as a condition precedent to the receipt of any rights or benefits conferred upon such person. The board shall be subrogated to such rights against the assets of any impaired insurer. J. The contractual obligations of the impaired insurer for which the board becomes or may become liable shall be as great as, but no greater than, what the contractual obligations of the impaired insurer would have been in the absence of an impairment, unless the obligations are reduced as permitted by subsection E of this section. However, the aggregate liability of the board shall not exceed one hundred thousand dollars with respect to cash value or annuity claims or three hundred thousand dollars for all benefits, including cash values and annuity claims, as well as death benefits, with respect to any one life. Notwithstanding any other law, the board is not obligated to pay any amount that does not constitute a payment of a contractual obligation, including taxable costs or attorney fees that could be awarded or any additional liabilities or obligations as might otherwise exist or accrue against the impaired insurer if the insurer had not become impaired. K. The board may: 1. Enter into such contracts as are necessary or proper to carry out the provisions and purposes of this article. 2. Sue and be sued, including taking any legal actions that are necessary and proper for recovery of any unpaid assessments pursuant to section 20-686. 3. Borrow money to effect the purposes of this article. Any notes or other evidence of indebtedness of the fund that are not in default shall be legal investments for domestic insurers and may be carried as admitted assets. 4. Employ and retain such persons as are necessary to handle the financial transactions of the fund and perform such other functions as become necessary or proper. 5. Negotiate and contract with any liquidator, rehabilitator, conservator or ancillary receiver to carry out the powers and duties of the board. 6. Take such legal action as may be necessary to avoid payment of improper claims. 7. Exercise, for the purposes of this article and to the extent approved by the director, the powers of a domestic life and disability insurer. In no case may the board issue insurance policies or annuity contracts other than those issued to perform the contractual obligations of the impaired insurer. |