Title 31 — Insurance and Securities.

For the purposes of this chapter, the term: (1) “Ancillary state” means any state other than a domiciliary state. (1A) “Commissioner” means the Commissioner of the Department of Insurance, Securities, and Banking. (2) “Creditor” is a person having any claim, whether matured or un…

The proceedings authorized by this chapter may be applied to: (1) All insurers who are doing, or have done, an insurance business in the District, and against whom claims arising from that business may exist now or in the future; (2) All insurers who purport to do an insurance bu…

(a) No delinquency proceeding shall be commenced under this chapter by anyone other than the Commissioner of the Department of Insurance, Securities, and Banking and no court shall have jurisdiction to entertain, hear, or determine any proceeding commenced by any other person. (b…

(a) Any receiver appointed in a proceeding under this chapter may at any time apply for, and any court of general jurisdiction may grant, restraining orders, preliminary and permanent injunctions, and other orders deemed necessary and proper to prevent: (1) The transaction of fur…

(a) Any officer, manager, director, trustee, owner, employee, or agent of any insurer, or any other persons with authority over or in charge of any segment of the insurer’s affairs, shall cooperate with the Commissioner in any proceeding under this chapter or any investigation pr…

Every proceeding commenced under §§ 31-2502.05 through 31-2502.07 [repealed], and §§ 31-4319 through 31-4321 [repealed], shall be deemed to have commenced under this chapter for the purpose of continuing the proceeding, except that in the discretion of the Commissioner the procee…

No insurer that is subject to any delinquency proceedings, whether formal or informal (administrative or judicial), shall: (1) Be released from the proceeding, unless the proceeding is converted into a judicial rehabilitation or liquidation proceeding; (2) Be permitted to solicit…

(a) The Commissioner may file in the Superior Court of the District of Columbia a petition alleging, with respect to a domestic insurer, that there exists grounds that would justify a court order for a formal delinquency proceeding against an insurer under this chapter, and that …

In all proceedings and judicial reviews under § 31-1308, all records of the insurer, other documents, all Department of Insurance, Securities, and Banking files, court records, and papers, so far as they pertain to or are a part of the record of the proceedings, shall be and rema…

The domiciliary receiver shall provide information to other state insurance regulators and guaranty associations, including reports and analyses of financial condition and the status of development of a plan of rehabilitation. The domiciliary receiver shall also permit a state in…

The Commissioner may apply by petition to the Superior Court of the District of Columbia for an order authorizing him or her to rehabilitate a domestic insurer or an alien insurer domiciled in the District based on any one or more of the following grounds: (1) The insurer is in s…

(a) An order to rehabilitate the business of a domestic insurer, or an alien insurer domiciled in the District, shall appoint the Commissioner and his or her successors in office the rehabilitator, and shall direct the rehabilitator forthwith to take possession of the assets of t…

(a) The Commissioner as rehabilitator may appoint 1 or more special deputies, who shall have all the powers and responsibilities of the rehabilitator granted under this section, and the Commissioner may employ any counsel, clerks, and assistants deemed necessary. The compensation…

(a) Any court in the District before which any action or proceeding in which the insurer is a party, or is obligated to defend a party, is pending when a rehabilitation order against the insurer is entered shall stay the action or proceeding for 90 days and any additional time ne…

(a) Whenever the Commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public, or would be futile, the Commissioner may petition the Superior Court of the District of Columbia for an ord…

The Commissioner may petition the Superior Court of the District of Columbia for an order directing him or her to liquidate a domestic insurer or an alien insurer domiciled in the District on the basis: (1) Of any ground for an order of rehabilitation as specified in § 31-1310, w…

(a) An order to liquidate the business of a domestic insurer shall appoint the Commissioner and his or her successors in office liquidator and shall direct the liquidator to take possession of the assets of the insurer and to administer them under the general supervision of the c…

(a) All policies, including bonds and other noncancellable business, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation shall continue in force only for the lesser of: (1) A period of 30 days from the date of entry of th…

The Commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in the District at the time he or she applies for a liquidation order. The court shall order dissolution of the corporatio…

(a) The liquidator shall have the power: (1) To appoint a special deputy or deputies to act for him or her under this chapter, and to determine his or her reasonable compensation. The special deputy shall have all powers of the liquidator granted by this section. The special depu…

(a) Unless the court otherwise directs, the liquidator shall give, or cause to be given, notice of the liquidation order as soon as possible: (1) By first class mail and either by telegram or telephone to the insurance commissioner of each jurisdiction in which the insurer is doi…

(a) Every person who receives notice in the form prescribed in § 31-1320 that an insurer which he represents as an agent is the subject of a liquidation order shall, within 30 days of the notice, provide to the liquidator (in addition to the information he may be required to prov…

(a) Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in the District, no action at law or equity or in arbitration shall be brought against the insurer or liquidator, whether in the District or elsewhere, nor shall any exist…

(a) As soon as practicable after the liquidation order, but not later than 120 days thereafter, the liquidator shall prepare in duplicate a list of the insurer’s assets. The list shall be amended or supplemented from time to time as the liquidator may determine. One copy shall be…

(a) Every transfer made or suffered and every obligation incurred by an insurer within 1 year prior to the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors if made or incurred without fair …

(a) After a petition for rehabilitation or liquidation has been filed, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair e…

(a)(1) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the insurer within 1 year before the filing of a successful petition for liquidation under this chapter, the ef…

(a) No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance voidable under this chapter shall be allowed unless he or she surrenders the preference, lien, conveyance, transfer, assignment, or encumbrance. If the av…

(a) Mutual debts or mutual credits, whether arising out of 1 or more contracts between the insurer and another person in connection with any action or proceeding under this chapter, shall be set off and the balance only shall be allowed or paid, except as provided in subsection (…

(a) As soon as practicable but not more than 2 years from the date of an order of liquidation under § 31-1316 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth: (1) The reasonable value of the assets of the insurer; (2) The i…

The amount recoverable by the liquidator from reinsurers shall not be reduced as a result of the delinquency proceedings, regardless of any provision in the reinsurance contracts or other agreements. The reinsurance shall be payable under contracts reinsured by the assuming insur…

(a)(1) An agent, broker, premium finance company, or any other person, other than the insured, responsible for the payment of a premium shall be obligated to pay any unpaid premium for the full policy term due the insurer at the time of the declaration of insolvency, whether earn…

(a) Within 120 days of a final determination of insolvency of an insurer by a court of competent jurisdiction of the District of Columbia, the liquidator shall make application to the court for approval of a proposal to disburse assets out of marshalled assets, from time to time …

(a) Proof of all claims shall be filed with the liquidator in the form required by § 31-1334 on or before the last day for filing specified in the notice required under § 31-1320, except that proof of claims for cash surrender values or other investment values in life insurance a…

(a) Proof of claim shall consist of a statement signed by the claimant that includes all of the following that are applicable: (1) The particulars of the claim including the consideration given for it; (2) The identity and amount of the security on the claim; (3) The payments mad…

(a) The claim of a third party which is contingent only on his first obtaining a judgment against the insured shall be considered and allowed as if there were no contingency. (b) A claim may be allowed even if contingent, if it is filed in accordance with § 31-1333. It may be all…

(a) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator. (b) Whether or not the third party files a claim, the insured may file a claim on his or her own behalf in the liquidation…

(a) When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant, or his or her attorney, by first class mail at the address shown in the proof of claim. Within 60 days from the mailing of the notice, the claiman…

Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person fails to prove and file that claim, the other person may do so in the creditor’s name, and shall be subrogated to the rights of the creditor, whether the claim…

(a) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct: (1) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to the creditors; or (2) …

The priority of distribution of claims from the insurer’s estate shall be in accordance with the order in which each class of claims is set forth in this chapter. Every claim in each class shall be paid in full or adequate funds retained for the payment before the members of the …

(a) The liquidator shall review all claims duly filed in the liquidation and shall make any further investigation he or she deems necessary. He or she may compound, compromise, or in any other manner negotiate the amount for which claims will be recommended to the court, except w…

Under the direction of the court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, in…

(a) All unclaimed funds subject to distribution remaining in the liquidator’s hands when he or she is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member, or other person who is unknown or cannot be found, shall be de…

(a) When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any…

After the liquidation proceeding has been terminated and the liquidator discharged, the Commissioner or other interested party may at any time petition the Superior Court of the District of Columbia to reopen the proceedings for good cause, including the discovery of additional a…

Whenever it shall appear to the Commissioner that the records of any insurer in process of liquidation or completely liquidated are no longer useful, he or she may recommend to the court, and the court shall direct, what records should be retained for future reference and what re…

The Superior Court of the District of Columbia may, as it deems desirable, order audits to be made of the books of the Commissioner relating to any receivership established under this chapter, and a report of each audit shall be filed with the Commissioner and with the court. The…

(a) If a domiciliary liquidator has not been appointed, the Commissioner may apply to the Superior Court of the District of Columbia by verified petition for an order directing him or her to act as conservator to conserve the property of an alien insurer not domiciled in the Dist…

(a) If no domiciliary receiver has been appointed, the Commissioner may apply to the Superior Court of the District of Columbia by verified petition for an order directing him or her to liquidate the assets, found in the District, of a foreign insurer or an alien insurer not domi…