2023 Connecticut General Statutes › Title 38a - Insurance › Chapter 704c - Insurers Rehabilitation and Liquidation Act and Termination of Domestic Life Insurance Companies › Section 38a-923. (Formerly Sec. 38-441). - Powers of liquidator.

(a) The liquidator shall have the power: (1) To appoint a special deputy to act for such liquidator under sections 38a-903 to 38a-961, inclusive, and to determine such special deputy's reasonable compensation. The special deputy shall have all powers of the liquidator granted by this section. The special deputy shall serve at the pleasure of the liquidator; (2) to employ employees and agents, legal counsel, actuaries, accountants, appraisers, consultants and such other personnel as the liquidator may deem necessary to assist in the liquidation, notwithstanding any provision of law, including chapters 55a and 67; (3) to fix the reasonable compensation of employees and agents, legal counsel, actuaries, accountants, appraisers and consultants with the approval of the court; (4) to pay reasonable compensation to persons appointed and to defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. The liquidator shall have the power to pay reasonable compensation to such persons on an interim basis. All such interim payments shall be subject to the approval of the court upon submission by the liquidator. In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the commissioner may advance the costs so incurred out of any appropriation for the maintenance of the Insurance Department. Any amounts so advanced for expenses of administration shall be repaid to the commissioner for the use of the Insurance Department out of the first available moneys of the insurer; (5) to hold hearings, to subpoena witnesses, to compel their attendance, to administer oaths, to examine any person under oath and to compel any person to subscribe to such person's testimony after it has been correctly reduced to writing, and in connection therewith to require the production of any books, papers, records or other documents which the liquidator deems relevant to the inquiry; (6) to collect all debts and moneys due and claims belonging to the insurer, wherever located, and for this purpose (A) to institute timely action in other jurisdictions in order to forestall garnishment and attachment proceedings against such debts; (B) to do such other acts as are necessary or expedient to collect, conserve or protect its assets or property, including the power to sell, compound, compromise or assign debts for purposes of collection upon such terms and conditions as the liquidator deems best; and (C) to pursue any creditor's remedies available to enforce the creditor's claims; (7) to conduct public and private sales of the property of the insurer; (8) to use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under section 38a-944; (9) to acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon or otherwise dispose of or deal with, any property of the insurer at its market value or upon such terms and conditions as are fair and reasonable. The liquidator shall also have power to execute, acknowledge and deliver any and all deeds, assignments, releases and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation; (10) to borrow money on the security of the assets in the insurer's estate or without security and to execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation. Any such funds borrowed may be repaid as an administrative expense and have priority over any other claims in class 1 under the priority of distributions; (11) to enter into such contracts as are necessary to carry out the order to liquidate and to affirm or disavow any contracts to which the insurer is a party; (12) to continue to prosecute and to institute in the name of the insurer or in the liquidator's own name any and all suits and other legal proceedings, in this state or elsewhere, and to abandon the prosecution of claims the liquidator deems unprofitable to pursue further. If the insurer is dissolved pursuant to section 38a-922, the liquidator shall have the power to apply to any court in this state or elsewhere for leave to substitute the liquidator for the insurer as plaintiff; (13) to prosecute any action which may exist on behalf of the creditors, members, policyholders or shareholders of the insurer against any officer of the insurer or any other person; (14) to remove any or all records and property of the insurer to the offices of the commissioner or to such other place as may be convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations shall have such reasonable access to the records of the insurer as is necessary for them to carry out their statutory obligations; (15) to deposit in one or more banks in this state such sums as are required for meeting current administration expenses and dividend distributions; (16) to invest all sums not currently needed, unless the court orders otherwise; (17) to file any necessary documents for record in the office of any recorder of deeds or record office in this state or elsewhere where property of the insurer is located; (18) to assert all defenses available to the insurer as against third persons, including statutes of limitation, statutes of frauds and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed shall not bind the liquidator. Whenever a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to such obligation and may defend only in the absence of a defense by such guaranty associations; (19) to exercise and enforce all the rights, remedies and powers of any creditor, shareholder, policyholder or member, including any power to avoid any transfer or lien that may be given by the general law and that is not included under sections 38a-928 to 38a-930, inclusive; (20) to intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee and to act as the receiver or trustee whenever the appointment is offered; (21) to enter into agreements with any receiver or commissioner of any other state relating to the rehabilitation, liquidation, conservation or dissolution of an insurer doing business in both states; (22) to exercise all powers conferred upon receivers by the laws of this state not inconsistent with the provisions of sections 38a-903 to 38a-961, inclusive; (23) to appoint, with the approval of the court, an advisory committee of policyholders, claimants or other creditors including guaranty associations should such a committee be deemed necessary. The committee shall serve at the pleasure of the commissioner and the decision to appoint an advisory committee shall be at the sole discretion of the commissioner. The committee shall serve without compensation and without reimbursement for expenses. No other committee shall be appointed by the commissioner or the court in liquidation proceedings conducted under sections 38a-903 to 38a-961, inclusive; and (24) to audit the books and records of all agents of the insurer insofar as those records relate to the business activities of the insurer.
(b) The enumeration, in this section, of the powers and authority of the liquidator shall not be construed as a limitation upon him, nor shall it exclude in any manner his right to do other acts not specifically enumerated, or otherwise provided for, as may be necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation.
(c) The liquidator shall not be obligated to defend any action against the insurer or insured and may enforce injunctions, stays and the claims procedure set forth in sections 38a-903 to 38a-961, inclusive. The liquidator may elect to defend any actions against the insurer or insureds if it is in the best interest of the estate. Any insureds not defended by a guaranty association shall provide their own defense, and include the cost of the defense as part of their claims, if the defense was an obligation of the insurer. The rights of the liquidator to contest coverage on a particular claim shall be deemed preserved without the necessity for an express reservation of rights.
(P.A. 79-382, S. 21; P.A. 80-482, S. 4, 345, 348; 80-483, S. 112, 145, 186; P.A. 92-93, S. 16; P.A. 98-214, S. 13; P.A. 10-5, S. 46.)
History: P.A. 80-482 abolished the department of business regulation and restored its division of insurance as an independent department (as it was prior to creation of the business regulation department in P.A. 77-614); P.A. 80-483 had no effect; Sec. 38-441 transferred to Sec. 38a-923 in 1991; P.A. 92-93 amended Subsec. (a) to allow repayment of borrowed funds as administrative expense, to make technical corrections for statutory consistency, and to add Subdivs. (23) and (24) re liquidator's powers to appoint advisory committee and audit books and records and added new Subsec. (c) re liquidator having no obligation to defend claims subsequent to entry of liquidation order; P.A. 98-214 amended Subsec. (a) to notwithstand any contrary provision of law, including chapters 55a and 67, to allow liquidator to, subject to the approval of the court, pay reasonable compensation to persons on an interim basis, to substitute “the creditor's” for “his” in Subpara. (a)(6)(C), to substitute “The liquidator” for “he” and “himself” and “the liquidator's” for “his” in Subdivs. (9) and (12), to delete “foreign guaranty associations” in Subdiv. (14), to delete “now held or hereafter” in Subdiv. (22), to make the decision to appoint an advisory committee be at the sole discretion of the commissioner, to delete compensation for “reasonable travel and per diem living expenses”, and to make technical changes, deleted “such” and “herein” in Subsec. (b), and replaced existing Subsec. (c) with new language re obligations and powers of the liquidator; P.A. 10-5 made technical changes in Subsec. (a), effective May 5, 2010.