40-3618. Same; appointment of special deputy, counsel, clerks and assistants; payment of costs and expenses; advisory committee; authority and responsibility of rehabilitator; illegal or improper cond
40-3618
40-3618. Same; appointment of special deputy, counsel, clerks andassistants; payment of costs and expenses; advisory committee; authority andresponsibility of rehabilitator; illegal or improper conduct detrimental toinsurer, remedies; plans for reorganization or other transformation of insurer;preparation of plan; approval or disapproval by court; implementation.(a) The commissioner as rehabilitator may appoint one or morespecial deputies, who shall have all the powers and responsibilities of therehabilitator granted under this section, and the commissioner may employ suchcounsel, clerks and assistants as deemed necessary. The compensation of thespecial deputy, counsel, clerks and assistants and all expenses of takingpossession of the insurer and of conducting the proceedings shall be fixed bythe commissioner, with the approval of the court and shall be paid out of thefunds or assets of the insurer. The persons appointed under this section shallserve at the pleasure of the commissioner.
(b) The commissioner, as rehabilitator, may appoint an advisory committee ofpolicyholders or other creditors including guaranty associations should such acommittee be deemed necessary. Such committees shall serve at the pleasure ofthe commissioner and shall serve without compensation other than reimbursementfor reasonable travel and per diem living expenses. No other committee of anynature shall be appointed by the commissioner or the court in rehabilitationproceedings conducted under this act.
(c) The rehabilitator may take such action as necessary or appropriate toreform and revitalize the insurer. The rehabilitator shall have all the powersof the directors, officers and managers, whose authority shall be suspended,except as they are redelegated by the rehabilitator. The rehabilitator shallhave full power to direct and manage, to hire and discharge employees subjectto any contract rights they may have, and to deal with the property andbusiness of the insurer.
(d) If it appears to the rehabilitator that there has been criminal ortortious conduct, or breach of any contractual or fiduciary obligationdetrimental to the insurer by any officer, manager, agent, broker, employee orother person, the rehabilitator may pursue all appropriate legal remedies onbehalf of the insurer.
(e) If the rehabilitator determines that reorganization, consolidation,conversion, reinsurance, merger or other transformation of the insurer isappropriate, the rehabilitator shall prepare a plan to effect such changes. Upon application of the rehabilitator for approval of the plan, and after suchnotice and hearings as the court may prescribe, the court may either approve ordisapprove the plan proposed, or may modify the plan and approve it asmodified. Anyplan approved under this section shall be, in the judgment of the court, fairand equitable to all parties concerned. If the plan is approved, therehabilitator shall carry out the plan. In the case of a life insurer, theplan proposed may include the imposition of liens upon the policies of thecompany, if all rights of shareholders are first relinquished. A plan for alife insurer may also propose imposition of a moratorium upon loan and cashsurrender rights under policies, for such period and to such an extent as maybe necessary.
(f) The rehabilitator shall have the power under K.S.A. 40-3629and 40-3630 to avoidfraudulent transfers.
History: L. 1991, ch. 125, § 14; July 1.