A. The Legislature finds that:

1. Existing provisions of law and present procedures are sometimes not adequate nor appropriate under all circumstances inorder to remedy the financial condition and the management of certain insurers;

2. Present laws are not adequate for the rehabilitation of insurers who voluntarily requestrehabilitation;

3. A void exists in the laws with respect to those insurers most susceptible to rehabilitation or the regaining of solvency;

4. The placing of an insurer in receivership often destroys or diminishes, or is likely to destroy ordiminish, one or more of the following values or assets:

a. the value of the insurance account or in-force business of the insurer,

b. the value of the insurer as a going concern,

c. the value of its agency force, and

d. the value of other of its assets;

5. Such values and assets should be preserved if the circumstances of the insurer's financial condition warrant an attempt to conserve or rehabilitate such insurer and such rehabilitation or conservation is otherwise feasible;

6. In the event receivership ultimately becomes necessary, preliminary supervision and conservatorship is preventive of a dissipation of assets and will thus benefit policyholders, creditors and owners;

7. Insurer delinquency, or the state's inability to properly proceed in a threatened delinquency, directly or indirectly affects other insurers by creating a lack of public confidence in insurance and in insurance companies and are destructive of public confidence in the capacity of the state to regulate insurers, and these and other harmful results of insurer delinquency are properly minimized by a further enactment designed to protect and in aid of insureds, creditors and owners; and

8. It is a proper concern of this state to attempt to correct or remedy insurer misconduct, ineptness or misfortune.

B. It is the purpose of this act to:

1. Provide for rehabilitation and conservation of insurers by authorizing and requiring the additional facility of supervision and conservatorship by the Insurance Commissioner, authorize action to resolve whether an attempt be made to rehabilitate and conserve an insurer, and avoid, if possible and feasible, the necessity of temporary or permanent receivership;

2. Provide for protection of the assets of an insurer pending determination of whether or not an insurer can be successfully rehabilitated; and

3. Provide a facility and direction for attempting the rehabilitation without immediate resort to the harsher remedy of receivership.

C. The substance and procedure of this act is, therefore, declared to be the public policy of this state and necessary to the public welfare. Such policy and welfare require the availability of the remedies provided by this law whenever circumstances warrant, and it is a condition of doing an insurance business in this state.

Laws 1975, c. 316, § 1, emerg. eff. June 12, 1975.