§ 27-25-30 - Injunction – Liquidation – Receivership of domestic society.
SECTION 27-25-30
§ 27-25-30 Injunction – Liquidation– Receivership of domestic society. – (a) When the commissioner of insurance upon investigation finds that a domesticsociety:
(1) Has exceeded its powers;
(2) Has failed to comply with any provision of this chapter;
(3) Is not fulfilling its contracts in good faith;
(4) Has a membership of less than four hundred (400) after anexistence of one year or more; or
(5) Is conducting business fraudulently or in a mannerhazardous to its members, creditors, the public, or the business; thecommissioner shall notify the society of the deficiency or deficiencies andstate in writing the reasons for his or her dissatisfaction. The commissionershall at once issue a written notice to the society requiring that the existingdeficiency or deficiencies be corrected. After the notice, the society shallhave a thirty (30) day period in which to comply with the commissioner'srequest for correction, and, if the society fails to comply, the commissionershall notify the society of the findings of noncompliance and require thesociety to show cause on a named date why it should not be enjoined fromcarrying on any business until the violation(s) complained of shall have beencorrected, or why an action in quo warranto should not be commenced against thesociety.
(b) If on that date the society does not present good andsufficient reasons why it should not be enjoined or why the action should notbe commenced, the commissioner of insurance may present the facts relating tothe action to the attorney general who shall, if he or she deems thecircumstances warrant, commence an action to enjoin the society fromtransacting business or in quo warranto.
(c) The court shall upon commencement of the action notifythe officers of the society of a hearing. If after a full hearing it appearsthat the society should be enjoined or liquidated or a receiver appointed, thecourt shall enter the necessary order. No enjoined society shall have theauthority to do business until:
(1) The commissioner of insurance finds that the violation(s)complained of has been corrected;
(2) The costs of the action shall have been paid by thesociety if the court finds that the society was in default as charged;
(3) The court has dissolved its injunction; and
(4) The commissioner of insurance has reinstated thecertificate of authority.
(d) If the court orders the society liquidated, it shall beenjoined from carrying on any further business, where the receiver of thesociety shall proceed at once to take possession of the books, papers, money,and other assets of the society and, under the direction of the court, proceedto close the affairs of the society and to distribute its funds to thoseentitled to the funds.
(e) No action under this section shall be recognized in anycourt of this state unless brought by the attorney general upon request of thecommissioner of insurance. Whenever a receiver is to be appointed for adomestic society, the court shall appoint the commissioner of insurance as thereceiver.
(f) The provisions of this section relating to hearing by thecommissioner of insurance, action by the attorney general at the request of thecommissioner of insurance, hearing by the court, injunction, and receivershipshall be applicable to a society that shall voluntarily determine todiscontinue business.