40-3625. Same; authority and responsibility of liquidator.
40-3625
40-3625. Same; authority and responsibility of liquidator.(a) The liquidator shall have the power:
(1) To appoint a special deputy or deputies to act for the liquidator underthis act, and to determine reasonable compensation for such deputies. Thespecialdeputy shall have all powers of the liquidator granted by this section. Thespecial deputy shall serve at the pleasure of the liquidator;
(2) to employ employees and agents, legal counsel, actuaries, accountants,appraisers, consultants and other personnel necessary to assist in theliquidation;
(3) to appoint an advisory committee of policyholders, claimants or othercreditors including guaranty associations should such a committee be deemednecessary. Such committee shall serve at the pleasure of the commissioner andshall serve without compensation other than reimbursement for personal traveland per diem living expenses. No other committee of any nature shall beappointed by the commissioner or the court in liquidation proceedings conductedunder this act;
(4) to fix the reasonable compensation of employees and agents, legalcounsel, actuaries, accountants, appraisers and consultants with the approvalof the court;
(5) to pay reasonable compensation to persons appointed and to defray fromthe funds or assets of the insurer all expenses of taking possession of,conserving, conducting, liquidating, disposing of, or otherwise dealing withthe business and property of the insurer;
(6) to hold hearings, to subpoena witnesses to compel their attendance, toadminister oaths, to examine any person under oath, and to compel any person tosubscribe to testimony of the person after the testimony has been correctlyreduced towriting; and in connection therewith to require the production of any books,papers, records or other documents which are relevant to the inquiry. Suchhearings shall be held in accordance with the Kansas administrative procedureact;
(7) to audit the books and records of all agents of the insurer insofar asthose records relate to the business activities of the insurer;
(8) to collect all debts and moneys due and claims belonging to the insurer,wherever located, and for this purpose:
(A) To institute timely action in other jurisdictions, in order to forestallgarnishment and attachment proceedings against such debts;
(B) to do such other acts as are necessary or expedient to collect, conserveor protect such insurer's assets or property, including the power to sell,compound,compromise or assign debts for purposes of collection upon reasonable terms andconditions; and
(C) to pursue any creditor's remedies available to enforce claims;
(9) to conduct public and private sales of the property of the insurer;
(10) to use assets of the estate of an insurer under a liquidation order totransfer policy obligations to a solvent assuming insurer, if the transfer canbe arranged without prejudice to applicable priorities under K.S.A.40-3641;
(11) to acquire, hypothecate, encumber, lease, improve, sell, transfer,abandon or otherwise dispose of or deal with, any property of the insurer atits market value or upon such terms and conditions as are fair and reasonable. The liquidator shall also have power to execute, acknowledge and deliver anyand all deeds, assignments, releases and other instruments necessary or properto effectuate any sale of property or other transaction in connection with theliquidation;
(12) to borrow money on the security of the insurer's assets or withoutsecurity and to execute and deliver all documents necessary to that transactionfor the purpose of facilitating the liquidation. Any such funds borrowed maybe repaid as an administrative expense and have priority over any other claimsin class 1 under the priority of distribution;
(13) to enter into such contracts as are necessary to carry out the order toliquidate, and to affirm or disavow any contracts to which the insurer is aparty;
(14) to continue to prosecute and to institute in the name of the insurer orin the liquidator's name any and all suits and other legal proceedings, in thisstate or outside this state, and to abandon the prosecution of unprofitableclaims. Ifthe insurer is dissolved under K.S.A. 40-3624, the liquidator shallhave the powerto apply to any court in this state or elsewhere for leave to substitute suchliquidator for the insurer as plaintiff;
(15) to prosecute any action which may exist on behalf of the creditors,members, policyholders or shareholders of the insurer against any officer ofthe insurer, or any other person;
(16) to remove any or all records and property of the insurer to the officesof the commissioner or to such other place as may be convenient for thepurposes of efficient and orderly execution of the liquidation. Guarantyassociations and foreign guaranty associations shall have such reasonableaccess to the records of the insurer as is necessary for them to carry outtheir statutory obligations;
(17) to deposit in one or more banks in this state such sums as are requiredfor meeting current administration expenses and dividend distributions;
(18) to invest all sums not currently needed, unless the court ordersotherwise;
(19) to file any necessary documents for record in the office of anyregister of deeds or record office in this state or elsewhere where property ofthe insurer is located;
(20) to assert all defenses available to the insurer as against thirdpersons, including statutes of limitation, statutes of frauds and the defenseof usury. A waiver of any defense by the insurer after a petition inliquidation has been filed shall not bind the liquidator. Whenever a guarantyassociation or foreign guaranty association has an obligation to defend anysuit, the liquidator shall give precedence to such obligation and may defendonly in the absence of a defense by such guaranty associations;
(21) to exercise and enforce all the rights, remedies and powers of anycreditor, shareholder, policyholder or member; including any power to avoidany transfer or lien that may be given by the general law and that is notincluded with K.S.A. 40-3629 through 40-3631;
(22) to intervene in any proceeding wherever instituted that might lead tothe appointment of a receiver or trustee, and to act as the receiver or trusteewhenever the appointment is offered;
(23) to enter into agreements with any receiver or commissioner of any otherstate relating to the rehabilitation, liquidation, conservation or dissolutionof an insurer doing business in both states; and
(24) to exercise all powers now held or hereafter conferred upon receiversby the laws of this state not inconsistent with the provisions of this act.
(b) The enumeration, in this section, of the powers and authority of theliquidator shall not be construed as limitation upon the liquidator, nor shallit exclude in any manner the right to do such other acts not specificallyenumerated or otherwise provided for, as may be necessary or appropriate forthe accomplishment of or in aid of the purpose of liquidation.
(c) Notwithstanding the powers of the liquidator as stated in subsections(a) and (b), the liquidator shall have no obligation to defend claims orto continue to defend claims subsequent to the entry of a liquidation order.
History: L. 1991, ch. 125, § 21; July 1.