Title 31A, Insurance Code

31A-27a-301. Rehabilitation orders. (1)(a) An order to rehabilitate the business of an insurer shall: (i) appoint the commissioner and the commissioner's successors in office as the rehabilitator; (ii) direct the rehabilitator to: (A) take possession and title of the assets of th…

31A-27a-302. Powers and duties of the rehabilitator. (1)(a) With court approval, the rehabilitator may take an action the rehabilitator considers necessary or appropriate to reform and revitalize the insurer, including: (i) canceling: (A) a policy; (B) an insurance or reinsurance…

31A-27a-303. Filing of rehabilitation plans. (1)(a) The rehabilitator shall prepare and file a plan to effect rehabilitation with the receivership court within: (i) one year after the day on which the rehabilitation order is entered; or (ii) such further time as the receivership …

31A-27a-304. Termination of rehabilitation. (1)(a) The rehabilitator may move for an order of liquidation whenever the rehabilitator believes further attempts to rehabilitate an insurer would: (i) substantially increase the risk of loss to creditors, policyholders, or the public;…

31A-27a-305. Coordination with guaranty associations and orderly transition to liquidation. (1) No later than 30 days following the day on which an order of rehabilitation is entered the rehabilitator or the rehabilitator's designated representative shall: (a) consult with any po…

31A-27a-401. Liquidation orders. (1)(a) An order to liquidate the business of an insurer shall: (i) appoint the commissioner and any successor in office as the liquidator; and (ii) direct the liquidator to: (A) take possession of the property of the insurer; and (B) administer th…

31A-27a-402. Continuance of coverage. (1) Notwithstanding any policy or contract language or any other statute, and unless ordered otherwise by the receivership court upon application by the receiver, a reinsurance contract by which the insurer assumes the insurance obligations o…

31A-27a-403. Continuance of coverage -- Health maintenance organizations. (1) As used in this section: (a) "Basic health care services" is as defined in Section 31A-8-101. (b) "Enrollee" is as defined in Section 31A-8-101. (c) "Health care" is as defined in Section 31A-1-301. (d)…

31A-27a-404. Sale or dissolution of the insurer's corporate entity. (1) Notwithstanding the entry of a liquidation order, the liquidator may apply for an order to sell or dissolve the corporate entity or charter of a domestic insurer, or the United States branch of an alien insur…

31A-27a-405. Powers of the liquidator. (1) The liquidator may: (a)(i) hold hearings, subpoena a witness to compel the witness' attendance, administer oaths, examine a person under oath, and compel a person to subscribe to that person's testimony after the testimony is correctly r…

31A-27a-406. Notice to creditors and others. (1) Unless the receivership court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible: (a) by first-class mail or electronic communication as permitted by the receiversh…

31A-27a-407. Duties of agents. (1)(a) At the request of the liquidator, an agent receiving notice of the entry of the liquidation order shall provide notice of that order: (i) on a form prescribed by the liquidator; (ii) to: (A) each policyholder of a policy issued through the ag…

31A-27a-501. Turnover of assets. (1)(a) If the receiver determines that funds or property in the possession of another person are rightfully the property of the estate, the receiver shall deliver to the person a written demand for immediate delivery of the funds or property: (i) …

31A-27a-502. Recovery from affiliates. (1)(a) If a receivership order is entered under this chapter, the receiver appointed under the receivership order may recover on behalf of the insurer from an affiliate as defined in Subsection 31A-1-301(5) the value received by the affiliat…

31A-27a-503. Unauthorized postpetition transfers. (1) Except as otherwise provided in this section, the receiver may avoid a transfer of an interest of the insurer in property, or an obligation incurred by the insurer, that is: (a) made or incurred after the day on which a petiti…

31A-27a-504. Voidable preferences and liens. (1)(a) A preference may be avoided by the rehabilitator or liquidator, if: (i) the insurer is insolvent at the time of the transfer; (ii) the transfer is made within four months before the day on which the petition is filed; (iii) with…

31A-27a-505. Avoidance of property title transfers. (1) The rehabilitator or liquidator has the creditor's rights described in this Subsection (1), without regard to any knowledge of the rehabilitator or liquidator or any creditor. (a)(i) The rehabilitator or liquidator is consid…

31A-27a-506. Fraudulent transfers and obligations. (1) For purposes of this section: (a) A "transfer": (i) is made when the transfer is so perfected that a bona fide purchaser from the insurer against whom applicable law permits the transfer to be perfected cannot acquire an inte…

31A-27a-507. Receiver as lien creditor. (1) The receiver may avoid a transfer of or lien on the property of, or obligation incurred by, an insurer that the insurer or a policyholder, creditor, member, or stockholder of the insurer: (a) may have avoided without regard to any knowl…

31A-27a-508. Liability of transferee. (1) Except as otherwise provided in this section, to the extent that the receiver obtains an order pursuant to Section 31A-27a-501, or avoids a transfer under Section 31A-27a-502, 31A-27a-503, 31A-27a-504, 31A-27a-506, or 31A-27a-507, the rec…

31A-27a-509. Claims of holders of void or voidable rights. (1)(a) The receiver may disallow a claim of a creditor who receives or acquires a preference, lien, conveyance, transfer, assignment, or encumbrance voidable under this chapter, unless the creditor surrenders the preferen…

31A-27a-510. Setoffs. (1)(a) A mutual debt or mutual credit shall be set off and the balance only allowed or paid: (i) whether arising out of one or more contracts between the insurer and another person in connection with an action or proceeding under this chapter; and (ii) excep…

31A-27a-511. Assessments. (1) As soon as practicable but not more than four years from the day on which an order of receivership of an insurer issuing assessable policies is entered, the receiver shall make a report to the receivership court setting forth: (a) the reasonable valu…

31A-27a-512. Reinsurer's liability. (1)(a) Except as otherwise provided in this chapter, the amount recoverable by the receiver from a reinsurer may not be reduced as a result of a delinquency proceeding with a finding of insolvency, regardless of any provision in the reinsurance…

31A-27a-512.1. Indemnitor liability. (1)(a) Except as otherwise provided in this chapter, the amount recoverable by the receiver from an indemnitor may not be reduced as a result of a delinquency proceeding with a finding of insolvency, regardless of any provision in the indemnit…

31A-27a-513. Reinsurance continuation and termination. (1) For purposes of this section: (a) "Coverage date" is the day on which an order of liquidation is entered. (b) "Election date" is the day on which an affected guaranty association elects to assume under this section the ri…

31A-27a-514. Recovery of premiums owed. (1)(a) An insured shall pay any unpaid earned premium or retrospectively rated premium due the insurer: (i) directly to the receiver; or (ii) to an agent that pays or is obligated to pay the receiver on behalf of the insured. (b)(i) Premium…

31A-27a-515. Commutation and release agreements. (1) For purposes of this section, "casualty claims" means the insurer's aggregate claims arising out of insurance contracts in the following lines: (a) farm owner multiperil; (b) homeowner multiperil; (c) commercial multiperil; (d)…

31A-27a-516. Reinsurance recoverable trust provisions. (1) As used in this section: (a) "Beneficiary" means the domiciliary insurance commissioner, as liquidator of the insurer for whose sole benefit a reinsurance recoverable trust is established. (b) "Grantor" means the reinsure…

31A-27a-601. Filing of claims. (1)(a) Subject to the other provisions of this Subsection (1), proof of a claim shall be filed with the liquidator in the form required by Section 31A-27a-602 on or before the last day for filing specified in the notice required under Section 31A-27…

31A-27a-602. Proof of claim. (1) Proof of claim shall consist of a statement signed by the claimant or on behalf of the claimant that includes all of the following that are applicable: (a) the particulars of the claim including the consideration given for the claim; (b) the ident…

31A-27a-603. Allowance of claims. (1)(a) Except as provided in Subsections (11) and (12), the liquidator shall: (i) review all claims filed in the liquidation proceeding in accordance with this chapter; and (ii) further investigate a claim, as the liquidator considers necessary. …

31A-27a-604. Claims under an occurrence policy, surety bond, surety undertaking. (1) Subject to Section 31A-27a-603, an insured may file a claim for the protection afforded under the insured's policy, irrespective of whether a claim is known at the time of filing, if the policy i…

31A-27a-605. Allowance of contingent and unliquidated claims. (1) As used in this section, "claim" means a demand for payment pursuant to Section 31A-27a-601 under the terms and conditions of a contract issued by the insurer as a result of a known accident, casualty, disaster, lo…

31A-27a-606. Special provisions for third party claims. (1) Whenever a 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 on or before the last day for filing claims. (2) Whether or not the t…

31A-27a-607. Disputed claims. (1)(a) When a claim is disallowed in whole or in part by the liquidator, written notice of the determination and of the right to object shall be given promptly to the claimant or the claimant's attorney of record, if any, by first-class mail at the a…

31A-27a-608. Liquidator's recommendations to the receivership court. (1) The liquidator shall, from time to time as determined by the liquidator, present to the receivership court for approval, reports of claims settled or determined by the liquidator under Section 31A-27a-603. (…

31A-27a-609. Claims of codebtor. If a creditor does not timely file a proof of the creditor's claim, the following may file a proof of the claim: (1) a person who is liable to the creditor together with the insurer; or (2) a person who has secured the creditor.

31A-27a-610. Secured creditor's claims. (1) The value of a security held by a secured creditor shall be determined in one of the following ways: (a) by converting the security into money according to the terms of the agreement pursuant to which the security is delivered to the cr…

31A-27a-611. Qualified financial contracts. (1) As used in this section: (a)(i) "Actual direct compensatory damages" does not include: (A) punitive or exemplary damages; (B) damages for lost profit or lost opportunity; or (C) damages for pain and suffering. (ii) "Actual direct co…

31A-27a-612. Administration of deductible policies and insured collateral. (1) As used in this section: (a) "Collateral" means any of the following that secures an insured's obligation to pay or to reimburse the insurer for deductible claim payments and to reimburse or pay to the…

31A-27a-701. Priority of distribution. (1)(a) The priority of payment of distributions on unsecured claims shall be in accordance with the order in which each class of claim is set forth in this section except as provided in Section 31A-27a-702. (b) All claims in each class shall…

31A-27a-702. Health maintenance organization claims. (1) For a delinquency proceeding under this chapter that is initiated before May 8, 2018, in the liquidation of a health maintenance organization, a claim for uncovered expenditures has priority over a Class 3 claim as provided…

31A-27a-703. Partial and final distributions of assets. (1)(a) With the approval of the receivership court, a liquidator may declare and pay: (i) one or more partial distributions on claims as those claims are allowed; and (ii) a final distribution. (b) All claims allowed within …

31A-27a-704. Early access disbursements. (1) As used in this section, "distributable assets" means general assets of the liquidation estate less: (a) amounts reserved, to the extent necessary and appropriate, for the entire Subsection 31A-27a-701(2)(a) expenses of the liquidation…

31A-27a-705. Unclaimed and withheld funds. (1)(a) If any funds of the receivership estate remain unclaimed after the final distribution under Section 31A-27a-703, the funds shall be placed in a segregated unclaimed funds account held by the commissioner. (b) If the owner of any o…