40-3614. Same; seizure of insurer; petition of commissioner; order of court; vacation of order; petition for hearing and review of order; failure to give notice to affected person.
40-3614
40-3614. Same; seizure of insurer; petition of commissioner; order ofcourt; vacation of order; petition for hearing and review of order; failure togive notice to affected person.(a) The commissioner may file in the district court of Shawneecounty a petition alleging, with respect to a domestic insurer:
(1) That there exists any grounds that would justify a court order for aformal delinquency proceeding against an insurer under this act;
(2) that the interests of policyholders, creditors or the public will beendangered by delay; and
(3) the contents of an order deemed necessary by the commissioner.
(b) Upon a filing under subsection (a), the court may issue forthwith, exparte and without a hearing, the requested order which shall direct thecommissioner to take possession and control of all or a part of the property,books, accounts, documents, other records of an insurer and of thepremises occupied by it for transaction of its business; and until furtherorder of the court enjoin the insurer and its officers, managers, agents andemployees from disposition of its property and from the transaction of theinsurer's business except with the written consent of the commissioner.
(c) The court shall specify in the order what the order's duration shall be,whichshall be such time as the court deems necessary for the commissioner toascertain the condition of the insurer. On motion of either party or on thecourt'sown motion, the court may from time to time hold such hearings as it deemsdesirable after such notice as it deems appropriate, and may extend, shorten,or modify the terms of the seizure order. The court shall vacate the seizureorder if the commissioner fails to commence a formal proceeding under this actafter having had a reasonable opportunity to do so. An order of the courtpursuant to a formal proceeding under this act shall ipso facto vacate theseizure order.
(d) Entry of a seizure order under this section shall not constitute ananticipatory breach of any contract of the insurer.
(e) An insurer subject to an ex parte order under this section may petitionthe court at any time after the issuance of such order for a hearing and reviewof the order. The court shall hold such a hearing and review not more than 15days after the request. A hearing under this subsection may be held privatelyin chambers and it shall be so held, if the insurer proceeded against sorequests.
(f) If, at any time after the issuance of such an order, it appears to thecourt that any person whose interest is, or will be, substantially affected bythe order did not appear at the hearing and has not been served, the court mayorder that notice be given. An order that notice be given shall not stay theeffect of any order previously issued by the court.
History: L. 1991, ch. 125, § 10; July 1.