375.1176. Director to be liquidator--powers and duties--special deputy may be appointed, powers--effect of liquidation--order for, issued when--plan for continued operation during appeal, contents--pe
Director to be liquidator--powers and duties--special deputy may beappointed, powers--effect of liquidation--order for, issuedwhen--plan for continued operation during appeal,contents--penalty for interference with records or property.
375.1176. 1. An order to liquidate the business of a domestic insurershall appoint the director and his successors as liquidator and shall directthe liquidator forthwith to take immediate possession of the assets of theinsurer and to administer them subject to the supervision of the court untilthe liquidator is discharged by the court. The liquidation of any insurershall be considered to be the business of insurance for purposes ofapplication of any law of this state. The liquidator shall be vested byoperation of law with the title to all of the property, contracts and rightsof action, and all of the books and records of the insurer ordered liquidated,wherever located, as of the entry of the order of liquidation. The ordershall require the liquidator to take immediate possession of and to secure allof the records and property of the insurer wherever it is located, and to takeall measures necessary to preserve the integrity of the insurer's records.The filing or recording of the order with the clerk of the court and therecorder of deeds of the county in which its principal office or place ofbusiness is located or, in the case of real estate, with the recorder of deedsof the county where the property is located, shall impart the same notice as adeed, bill of sale or other evidence of title duly filed or recorded with thatrecorder of deeds would have imparted.
2. With the approval of the court, the director as liquidator mayappoint a special deputy or deputies to act for him under sections 375.1175 to375.1230. The special deputy shall not be an employee of the department ofinsurance, financial institutions and professional registration. The specialdeputy shall have all powers of the liquidator granted by sections 375.1175 to375.1230. The special deputy shall administer and liquidate the insolventinsurer subject to the general supervision of the director and the specificsupervision of the court as provided in sections 375.1175 to 375.1230.
3. Upon issuance of the order of liquidation, the rights and liabilitiesof any such insurer and of its creditors, policyholders, shareholders, membersand any other persons interested in its estate shall become fixed and thetermination of any period fixed by any statute of limitations provided by lawshall be suspended as of the date of entry of the order of liquidation, exceptas provided in sections 375.1178, 375.1206 and 375.1210. Rights ofshareholders provided by any law other than as provided by sections 375.1150to 375.1246 shall be suspended upon issuance of the order of liquidation.
4. An order to liquidate the business of an alien insurer domiciled inthis state shall be in the same terms and have the same legal effect as anorder to liquidate a domestic insurer, except that the assets and the businessin the United States shall be the only assets and business included therein.
5. At the time of petitioning for an order of liquidation, or at anytime thereafter, the director, after making determination of an insurer'sinsolvency, may petition the court for a judicial declaration of suchinsolvency. After providing such notice and hearing as it deems proper, thecourt may make the declaration.
6. (1) Any order issued under this section shall require periodicfinancial reports to the court by the liquidator. Financial reports shallinclude, at a minimum, the assets and liabilities of the insurer and all fundsreceived or disbursed by the liquidator during the current period. Financialreports shall be filed within one year of the liquidation order and at leastannually thereafter.
(2) After an order of liquidation has been entered, the liquidator ofsuch insurer shall file with the director a statement which shall reflect theclaims reserves, including losses incurred but not reported, and unearnedpremium reserves which have been established by the liquidator and which shallalso set forth the amounts of such reserves that are allocable to particularreinsurers of the insolvent company. A similar statement shall be filed byeach liquidator not less frequently than annually and shall be considered forall intents and purposes as the annual statement which was required to befiled by the insurer with the director prior to the liquidation proceedings.To the extent that any reinsurer of an insurer in liquidation would have beenrequired under any agreement pertaining to reinsurance to post letters ofcredit or other security prior to an order of liquidation to cover suchreserves reflected upon a statement filed with a regulatory authority, suchreinsurer shall be required to post letters of credit or other security tocover such reserves after an insurer has been placed in liquidation. If areinsurer shall fail to post letters of credit or other security required by areinsurance agreement or the provisions of this section, the director mayissue an order barring such reinsurer from thereafter reinsuring any insurerwhich is incorporated under the laws of the state of Missouri.
7. (1) Within five days after the initiation of an appeal of an orderof liquidation, the liquidator shall present for the court's approval a planfor the continued performance of the defendant company's policy claimsobligations, including the duty to defend insureds under liability insurancepolicies, during the pendency of an appeal. Such plan shall provide for thecontinued performance and payment of policy claims obligations in the normalcourse of events, notwithstanding the grounds alleged in support of the orderof liquidation including the ground of insolvency. In the event the defendantcompany's financial condition, in the judgment of the liquidator, will notsupport the full performance of all policy claims obligations during theappeal pendency period, the plan may prefer the claims of certainpolicyholders and claimants over creditors and interested parties as well asother policyholders and claimants, as the liquidator finds to be fair andequitable considering the relative circumstances of such policyholders andclaimants. The court shall examine the plan submitted by the liquidator andif it finds the plan to be in the best interests of the parties, the courtshall approve the plan. No action shall lie against the liquidator or any ofhis deputies, agents, clerks, assistants or attorneys by any party based onpreference in an appeal pendency plan approved by the court.
(2) The appeal pendency plan shall not supersede or affect theobligations of any insurance guaranty association.
(3) Any such plans shall provide for equitable adjustments to be made bythe liquidator to any distributions of assets to guaranty associations, in theevent that the liquidator pays claims from assets of the estate, which wouldotherwise be the obligations of any particular guaranty association but forthe appeal of the order of liquidation, such that all guaranty associationsequally benefit on a pro rata basis from the assets of the estate. Further,in the event an order of liquidation is set aside upon any appeal, the companyshall not be released from delinquency proceedings unless and until all fundsadvanced by any guaranty association, including reasonable allocated lossadjustment expenses in connection therewith relating to obligations of thecompany, shall be repaid in full, together with interest at the judgment rateof interest or unless an arrangement for repayment thereof has been made withthe consent of all applicable guaranty associations.
8. Any person who shall knowingly destroy, conceal, convert or alter anyrecords or property of an insurer after entry of an order of liquidation,without having received prior written permission of the liquidator or of thecourt, or who shall knowingly neglect or refuse, upon the order or demand ofthe liquidator, to deliver to the liquidator any records or property of aninsurer in his possession or control, shall be guilty of a class C felony.
(L. 1991 H.B. 385, et al. § 66, A.L. 1992 H.B. 1574)