Effective 28 Aug 1991

375.1168. Director may appoint special deputies, powers — rehabilitation procedures — criminal conduct of party, power of director — advisory committee may be appointed, when. — 1. The director as rehabilitator may appoint one or more special deputies, who shall have all the powers and responsibilities of the rehabilitator granted under this section, and the director may employ such counsel, clerks and assistants as deemed necessary. The compensation of the special deputy, counsel, clerks and assistants and all expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the director with the approval of the court and shall be paid out of the funds or assets of the insurer. The persons appointed under this section shall serve at the pleasure of the director. In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the director may advance the costs so incurred out of any appropriation to the department for such purpose. Any amounts so advanced for expenses or administration shall be repaid to the director out of the first available money of the insurer, and shall be paid by the director to the state treasurer for deposit to the general revenue fund.

2. The rehabilitator may take such action as he deems necessary or appropriate to reform and revitalize the insurer. He shall have all the powers of the directors, officers, and managers, whose authority shall be suspended, except as they are redelegated by the rehabilitator. He shall have full power to direct and manage, to hire and discharge employees subject to any contract rights they may have, and to deal with property and business of the insurer.

3. If it appears to the rehabilitator that there has been criminal or tortious conduct, or breach of any contractual or fiduciary obligation detrimental to the insurer by any officer, manager, agency, employee or other person, the rehabilitator may pursue all appropriate legal remedies on behalf of the insurer.

4. If the rehabilitator determines that reorganization, consolidation, conversion, reinsurance, merger or other transformation of the insurer is appropriate, he shall prepare a plan to effect such changes. Upon application of the rehabilitator for approval of the plan, and after such notice and hearings as the court may prescribe, the court may either approve or disapprove the plan proposed, or may modify it and approve it as modified. Any plan approved under this section shall be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the rehabilitator shall carry out the plan. In the case of a life insurer, the plan proposed may include the imposition of liens upon the policies of the company, if all rights of shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies, for such period and to such an extent as may be necessary.

5. The rehabilitator shall have all powers provided by law to avoid fraudulent transfers.

6. The rehabilitator, with the approval of the court, may appoint an advisory committee of policyholders, claimants, or other creditors should such a committee be deemed necessary. Such committee shall serve at the pleasure of the rehabilitator and shall serve without compensation other than reimbursement for reasonable travel and other expenses. No other committee of any nature shall be appointed by the rehabilitator or the court in rehabilitation proceedings conducted under this section.

­­--------

(L. 1991 H.B. 385, et al. § 61)