56-9-402 - Application by commissioner to liquidate assets of foreign or alien insurer Grounds Notice to insurer Issuance of order by court Receiver Payment of claims after liquidation.
56-9-402. Application by commissioner to liquidate assets of foreign or alien insurer Grounds Notice to insurer Issuance of order by court Receiver Payment of claims after liquidation.
(a) If no domiciliary receiver has been appointed, the commissioner may apply to the chancery court of Davidson County by verified petition for an order directing the commissioner to liquidate the assets found in this state of a foreign insurer or an alien insurer not domiciled in this state, on any of the following grounds:
(1) Any of the grounds in § 56-9-301 or § 56-9-306; or
(2) Any of the grounds specified in § 56-9-401(a)(2)-(4).
(b) When an order is sought under subsection (a), the court shall cause the insurer to be given the notice and time to respond thereto as is reasonable under the circumstances.
(c) If it appears to the court that the best interests of creditors, policyholders and the public so require, the court may issue an order to liquidate in whatever terms it deems appropriate. The filing or recording of the order with the clerk of the chancery court of Davidson County, or the recorder of deeds of the county in which the principal business of the company is located or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale or other evidence of title duly filed or recorded with that recorder of deeds would have imparted.
(d) (1) If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section, the liquidator under this section shall thereafter act as ancillary receiver under § 56-9-404.
(2) If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section, the liquidator under this section may petition the court for permission to act as ancillary receiver under § 56-9-404.
(e) On the same grounds as are specified in subsection (a), the commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer's assets and business over which the court will exercise jurisdiction, or any lesser part that the commissioner deems desirable for the protection of the policyholders and creditors in this state.
(f) The court may order the commissioner, when the commissioner has liquidated the assets of a foreign or alien insurer under this section, to pay claims of residents of this state against the insurer under such rules as to the liquidation of insurers under this chapter as are otherwise compatible with this section.
[Acts 1991, ch. 142, § 4.]