(a) Whenever it appears to the Insurance Commissioner that any person has committed a violation of this subchapter which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders, or the public, then the commissioner may proceed as provided in § 23-68-101 et seq. to take possession of the property of the domestic insurer and to conduct the business thereof.

(b) If an order for liquidation or rehabilitation of the domestic insurer is entered, the receiver appointed under such an order shall have the right to recover on behalf of the insurer the distributions and payments made during the one (1) year preceding the petition for liquidation, conservation, or rehabilitation:

(1) The amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer on its capital stock to any parent corporation or holding company or person or affiliate who otherwise controlled the insurer; or

(2) Any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or its subsidiaries to a director, officer, or employee.

(c) No such distribution shall be recoverable if the parent or affiliate shows that, when paid, such a distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that such a distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.

(d) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time such distributions were paid shall be liable up to the amount of the distributions or payments under subsection (b) of this section the person received. Any person who otherwise controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions he or she would have received if they had been paid immediately. If two (2) or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.

(e) The maximum amount recoverable under this section shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.

(f) To the extent that any person liable under subsection (d) of this section is insolvent or otherwise fails to pay claims due from it pursuant to that subsection, its parent corporation or holding company, or person who otherwise controlled it at the time the distribution was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from such a parent corporation or holding company or person who otherwise controlled it.