Sec. 38a-928. (Formerly Sec. 38-446). Fraudulent transfers prior to petition.
Sec. 38a-928. (Formerly Sec. 38-446). Fraudulent transfers prior to petition.
(a) Every transfer made or suffered and every obligation incurred by an insurer within
one year prior to the filing of a successful petition for rehabilitation or liquidation under
sections 38a-903 to 38a-961, inclusive, is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay,
or defraud either existing or future creditors. A transfer made or an obligation incurred
by an insurer ordered to be rehabilitated or liquidated under said sections, which is
fraudulent under this section, may be avoided by the receiver, except as to a person who
in good faith is a purchaser, lienor, or obligee for a present fair equivalent value, and
except that any purchaser, lienor, or obligee, who in good faith has given a consideration
less than fair for such transfer, lien, or obligation, may retain the property, lien or obligation as security for repayment. The court may, on due notice, order any such transfer
or obligation to be preserved for the benefit of the estate, and in that event, the receiver
shall succeed to and may enforce the rights of the purchaser, lienor, or obligee.
(b) (1) A transfer of property other than real property shall be deemed to be made
or suffered when it becomes so far perfected that no subsequent lien obtainable by legal
or equitable proceedings on a simple contract could become superior to the rights of the
transferee under subsection (c) of section 38a-930.
(2) A transfer of real property shall be deemed to be made or suffered when it
becomes so far perfected that no subsequent bona fide purchaser from the insurer could
obtain rights superior to the rights of the transferee.
(3) A transfer which creates an equitable lien shall not be deemed to be perfected
if there are available means by which a legal lien could be created.
(4) Any transfer not perfected prior to the filing of a petition for liquidation shall
be deemed to be made immediately before the filing of the successful petition.
(5) The provisions of this subsection apply whether or not there are or were creditors
who might have obtained any liens or persons who might have become bona fide purchasers.
(c) Any transaction of the insurer with a reinsurer shall be deemed fraudulent and
may be avoided by the receiver under subsection (a) of this section if: (1) The transaction
consists of the termination, adjustment, or settlement of a reinsurance contract in which
the reinsurer is released from any part of its duty to pay the originally specified share
of losses that had occurred prior to the time of the transaction, unless the reinsurer gives
a present fair equivalent value for the release; and (2) any part of the transaction took
place within one year prior to the date of filing of the petition through which the receivership was commenced.
(d) Any person receiving property from the insurer or any benefit thereof which is
a fraudulent transfer under subsection (a) of this section shall be personally liable therefor and shall be bound to account to the liquidator.
(P.A. 79-382, S. 26; P.A. 92-93, S. 20.)
History: Sec. 38-446 transferred to Sec. 38a-928 in 1991; P.A. 92-93 added new Subsec. (d) re personal liability to
liquidator for receipt of property and made technical corrections for statutory consistency.