Sec. 38a-18. (Formerly Sec. 38-9). Application by commissioner to act as receiver.
Sec. 38a-18. (Formerly Sec. 38-9). Application by commissioner to act as receiver. (a) Whenever any domestic insurance company or corporation which is under
the supervision of the commissioner (1) is insolvent; or (2) has refused to submit its
books, papers, accounts or affairs to the reasonable inspection of the commissioner, his
actuary or examiner; or (3) has permitted its capital to fall below the limits specified in
either section 38a-72 or its charter, or has failed to restore any deficiency within the
time prescribed by subsection (d) of section 38a-71, or has failed to observe any other
order of the commissioner authorized by statute; or (4) has, by contract of reinsurance
or otherwise, transferred or attempted to transfer substantially its entire property or
business, or entered into any transaction the effect of which is to merge substantially
its entire property or business in the property or business of any other company, corporation or association, without having first obtained the written approval of the commissioner; or (5) is found, after an examination, to be in such condition that its further
transaction of business will be hazardous to its policyholders or to its creditors or to the
public; or (6) has wilfully violated its charter or any law of the state; or (7) whenever any
officer or director of such company has refused to be examined under oath concerning
its affairs; or (8) if such company is organized under the laws relating to assessment
companies, its condition is found, after examination, to be such that it could not meet
the lawful requirements for incorporation and authorization, then and in any such case
the commissioner may, the Attorney General representing him, apply to the superior
court or any judge thereof for the judicial district in which the principal office of such
company is located, for an order directing such company to show cause why the commissioner should not take possession of its property and conduct its business, and for such
other relief as the nature of the case and the interests of its policyholders, creditors and
stockholders or the public may require.
(b) Whenever it appears to the commissioner that any of the conditions set forth in
subsection (a) of this section exists or that irreparable loss and injury to the property or
business of any insurance company has occurred or may occur unless the commissioner
so acts immediately, the commissioner, without notice and before applying to the court
for any order, forthwith shall take possession of the property, business, books, records
and accounts of such company, and of the offices and premises occupied by it for the
transaction of its business, and retain possession subject to the order of the court. Any
person having possession of, and refusing to deliver, any of the books, records or assets
of a company against whom a seizure order has been issued by the commissioner shall
be fined not more than one thousand dollars, or imprisoned not more than one year,
or both.
(c) Whenever the commissioner makes any seizure as provided in subsection (b)
of this section, the chief of police for the town or municipality in which the principal
office of the company is located, and the Commissioner of Public Safety, shall, on
demand of the commissioner, furnish him with such patrolmen, troopers or officers as
may be necessary in enforcing or effecting any such seizure. Not more than fifteen days
after making any seizure, the commissioner shall institute a proceeding under subsection
(a) of this section, returnable not less than twelve or more than thirty days after the
service thereof.
(1949 Rev., S. 6035; 1957, P.A. 448, S. 44; 1967, P.A. 518; 1971, P.A. 179, S. 24; P.A. 77-614, S. 486, 610; P.A. 78-280, S. 2, 127; P.A. 90-243, S. 5; P.A. 00-99, S. 83, 154.)
History: 1967 act made previous provisions Subsec. (a), replacing former alphabetic Subdiv. indicators with numeric
indicators and rephrasing provision re failure to observe commissioner's orders to make good deficiencies, etc., and added
Subsecs. (b) to (f); 1971 act amended Subsec. (c) to require institution of proceeding within 15 days after seizure rather
than "immediately" and "returnable not less than twelve or more than thirty days after the service thereof" rather than "in
no case more than thirty days after such seizure, or the next return day but one, whichever shall be sooner"; P.A. 77-614
replaced commissioner of state police with commissioner of public safety in Subsec. (c), effective January 1, 1979; P.A.
78-280 substituted "judicial district" for "county" in Subsec. (a); P.A. 90-243 deleted Subsecs. (d) to (f), inclusive, re the
surplus and deficiency of a company in receivership but See Sec. 38a-71 for replacement provisions; Sec. 38-9 transferred
to Sec. 38a-18 in 1991; P.A. 00-99 deleted reference to sheriff of the county and deputy sheriffs in Subsec. (c), effective
December 1, 2000.
Annotations to former section 38-9:
It is no defense to an application by insurance commissioner for a receiver that another company has assumed all the
liabilities. 45 C. 381. Statute vests the commissioner with a wide range of discretion, with the exercise of which the courts
will not interfere. 60 C. 460. Exclusive right of commissioner to apply for receiver where company is acting illegally. 80
C. 684. See note to Sec. 38-131. Cited. 128 C. 363.
Annotation to present section:
Subsec. (a):
Subdiv. (2) cited. 219 C. 384.