31A-27a-303 - Filing of rehabilitation plans.
31A-27a-303. Filing of rehabilitation plans.
(1) (a) The rehabilitator shall prepare and file a plan to effect rehabilitation with thereceivership court within:
(i) one year after the day on which the rehabilitation order is entered; or
(ii) such further time as the receivership court may allow.
(b) The receivership court may take an action described in Subsection (1)(c):
(i) upon application of the rehabilitator for approval of a plan; and
(ii) after the notice and hearings the receivership court may prescribe.
(c) If the conditions of Subsection (1)(b) are met, the receivership court may:
(i) approve the plan proposed;
(ii) disapprove the plan proposed; or
(iii) (A) modify the plan proposed; and
(B) approve the plan as modified.
(d) If the plan is approved, the rehabilitator shall carry out the plan.
(e) In the case of a life insurer, the plan proposed may:
(i) include the imposition of a lien upon a policy of the insurer, if all rights ofshareholders are relinquished; and
(ii) propose imposition of a moratorium upon loan and cash surrender rights under apolicy for a period not to exceed one year from the day on which the order approving therehabilitation plan is entered, unless the receivership court, for good cause shown, extends themoratorium.
(2) Once a plan is filed, any party in interest may object to the plan.
(3) A plan shall:
(a) except as provided in Subsection (5), provide no less favorable treatment of a claimor class of claims than would occur in liquidation, unless the holder of a particular claim orinterest agrees to a less favorable treatment of that particular claim or interest;
(b) provide adequate means for the plan's implementation;
(c) contain information concerning the financial condition of the insurer and theoperation and effect of the plan, as far as is reasonably practicable in light of:
(i) the nature and history of the insurer;
(ii) the condition of the insurer's records; and
(iii) the nature of the plan; and
(d) provide for the disposition of the records relevant to the duties and obligationscovered by the plan.
(4) A plan may include any other provisions not inconsistent with this chapter, including:
(a) payment of distributions;
(b) (i) assumption or reinsurance of all or a portion of the insurer's remaining liabilitiesby a licensed insurer or other entity; and
(ii) transfer of assets and related records to the licensed insurer or other entity;
(c) to the extent appropriate, application of insurance company regulatory marketconduct standards to any entity administering claims on behalf of the receiver or assuming directliabilities of the insurer;
(d) contracting with a guaranty association or any other qualified entity to perform theadministration of claims;
(e) annual independent financial and performance audits of any entity administering
claims on behalf of the receiver that is not otherwise subject to examination pursuant to stateinsurance law; and
(f) termination of the insurer's liabilities other than those under policies of insurance asof a date certain.
(5) (a) A plan may designate and separately treat one or more separate subclassesconsisting only of those claims within the subclasses that are for or reduced to de minimisamounts.
(b) For purposes of this Subsection (5), a "de minimis amount" is an amount equal to orless than a maximum de minimis amount approved by the receivership court as being reasonableand necessary for administrative convenience.
Enacted by Chapter 309, 2007 General Session