33-2-1321. Commissioner's summary orders and supervision proceedings. (1) If the commissioner determines, after a hearing held under subsection (5), that any domestic insurer has committed or engaged in or is about to commit or engage in any act, practice, or transaction that would subject it to delinquency proceedings under this part, the commissioner may make and serve upon the insurer and any other persons involved orders that are reasonably necessary to correct or eliminate the conduct.

(2) If upon examination or at any other time the commissioner determines that any domestic insurer is in a condition that renders the continuance of its business hazardous to the public or to holders of its policies or certificates of insurance or if the domestic insurer gives its consent, then the commissioner shall notify the insurer of the commissioner's determination and furnish to the insurer a written list of the commissioner's requirements to abate the determination.

(3) If the commissioner makes a determination to supervise an insurer subject to an order under subsection (1) or (2), the commissioner shall notify the insurer that it is under the supervision of the commissioner. During the period of supervision, the commissioner may appoint a supervisor to supervise the insurer. The order appointing a supervisor shall direct the supervisor to enforce orders issued under subsections (1) and (2) and may also require that the insurer may not do any of the following things during the period of supervision without the prior approval of the commissioner or the supervisor:

(a) dispose of, convey, or encumber any of its assets or its business in force;

(b) withdraw from any of its bank accounts;

(c) lend any of its funds;

(d) invest any of its funds;

(e) incur any debt, obligation, or liability;

(f) merge or consolidate with another company; or

(g) enter into any new reinsurance contract or treaty.

(4) Any insurer subject to an order under this section shall comply with the lawful requirements of the commissioner and, if placed under supervision, has 60 days from the date the supervision order is served within which to comply with the requirements of the commissioner. If the insurer fails to comply within that time, the commissioner may institute proceedings under 33-2-1331 or 33-2-1341 to have a rehabilitator or liquidator appointed or extend the period of supervision.

(5) The notice of hearing under subsection (1) and any order issued pursuant to subsection (1) must be served upon the insurer pursuant to the applicable rules of civil or administrative procedure. The notice of hearing must state the time and place of hearing and the conduct, condition, or ground upon which the commissioner would base an order. Unless mutually agreed between the commissioner and the insurer, the hearing must occur not less than 10 days or more than 30 days after notice is served and must be either in Lewis and Clark County or in some other place convenient to the parties to be designated by the commissioner. The commissioner shall hold all hearings under subsection (1) privately unless the insurer requests a public hearing, in which case the hearing must be public.

(6) (a) Any insurer subject to an order under subsection (2) may request a hearing to review that order. The hearing must be held as provided in subsection (5), but the request for a hearing may not stay the effect of the order.

(b) If the commissioner issues an order under subsection (2), the insurer may, at any time, waive a commissioner's hearing and apply for immediate judicial relief by means of any remedy afforded by law without first exhausting administrative remedies. Subsequent to a hearing, any party to the proceedings whose interests are substantially affected is entitled to judicial review of any order issued by the commissioner.

(7) During the period of supervision the insurer may request the commissioner to review an action taken or proposed to be taken by the supervisor, specifying the reason why the action complained of is believed not to be in the best interest of the insurer.

(8) If any person has violated any supervision order issued under this section that was still in effect for that person, the person is subject to a civil penalty imposed by the district court not to exceed $10,000.

(9) The commissioner may apply for and any court of general jurisdiction may grant restraining orders, preliminary and permanent injunctions, and other orders that may be necessary to enforce a supervision order.

(10) If any person subject to the provisions of this part, including any person described in 33-2-1310(1), knowingly violates any valid order of the commissioner issued under the provisions of this section and, as a result of the violation, the net worth of the insurer is reduced or the insurer suffers loss it would not otherwise have suffered, the person is personally liable to the insurer for the amount of any reduction or loss. The commissioner or supervisor is authorized to bring an action on behalf of the insurer in the district court to recover the amount of the reduction or loss together with any costs.

History: En. Sec. 9, Ch. 383, L. 1979; amd. Sec. 1099, Ch. 56, L. 2009.