§ 58-30-95. Termination of rehabilitation.
§58‑30‑95. Termination of rehabilitation.
(a) Whenever therehabilitator believes further attempts to rehabilitate an insurer wouldsubstantially increase the risk of loss to creditors, policyholders or thepublic, or would be futile, the rehabilitator may petition the Court for anorder of liquidation. A petition under this subsection shall have the sameeffect as a petition under G.S. 58‑30‑100. The Court may make suchfindings and issue such orders at any time upon its own motion. The Courtshall permit the directors of the insurer to take such actions as arereasonably necessary to defend against the petition and may order payment fromthe estate of the insurer of such costs and other expenses of defense asjustice may require. The court may allow the payment of costs and expensesincurred in defending against the petition for an order of liquidation onlyupon a specific finding that the defense was conducted, and the costs andexpenses were incurred, in good faith. The directors shall have the burden ofproving good faith. Evidence of good faith shall be the existence of areasonable basis to conclude that the insurer is actually solvent or that thereexists a viable means to accomplish rehabilitation without jeopardizing theremaining assets of the insurer and that continued operation of the insurer isin the best interest of the policyholders, stockholders, and creditors.
(b) The rehabilitatormay at any time petition the Court for an order terminating rehabilitation ofan insurer. The Court shall also permit the directors of the insurer topetition the Court for an order terminating rehabilitation of the insurer andmay order payment from the estate of the insurer of such costs and otherexpenses of such petition as justice may require. The court may allow thepayment of costs and expenses incurred in defending against the petition for anorder terminating rehabilitation only upon a specific finding that the defensewas conducted, and the costs and expenses were incurred, in good faith. The directorsshall have the burden of proving good faith. Evidence of good faith shall bethe existence of a reasonable basis to conclude that the insurer is actuallysolvent or that there exists a viable means to accomplish rehabilitationwithout jeopardizing the remaining assets of the insurer and that continuedoperation of the insurer is in the best interest of the policyholders,stockholders, and creditors. If the Court finds that rehabilitation has beenaccomplished and that grounds for rehabilitation under G.S. 58‑30‑75no longer exist, it shall order that the insurer be restored to possession ofits property and the control of the business. The Court may also make thatfinding and issue that order at any time upon its own motion. (1989,c. 452, s. 1; 1993, c. 452, s. 41.)