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2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-32 - Application of authorized proceedings

17B:32-32. Application of authorized proceedings
2. The proceedings authorized by this act shall be applied to:
a. All insurers who are doing, or have done, insurance business in this State, and against whom claims arising from that business may exist now or in the future.
b. All insurers who purport to do insurance business in this State.
c. All insurers who have insureds residing in this State.
d. All other persons organized or in the process of organizing with the intent to do life or health insurance or annuity business in this State.
L.1992,c.65,s.2.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-34 - Jurisdiction over delinquency proceedings

17B:32-34. Jurisdiction over delinquency proceedings
4. a. No delinquency proceeding shall be commenced under this act by anyone other than the commissioner and no court shall have jurisdiction to entertain, hear or determine any proceeding commenced by any other person.
b. No court of this State shall have jurisdiction to entertain, hear or determine any complaint praying for the dissolution, liquidation, rehabilitation, sequestration, conservation or receivership of any insurer; or praying for an injunction or restraining order or other relief preliminary to, incidental to or relating to such proceedings other than in accordance with this act.
c. In addition to other grounds for jurisdiction provided by the law of this State, a court of this State having jurisdiction of the subject matter has jurisdiction over a person served pursuant to the Rules Governing the Courts of the State of New Jersey or other applicable provisions of law in an action brought by the receiver of a domestic insurer or an alien insurer domiciled in this State:
(1) If the person served is an agent, broker or other person who has at any time written policies of insurance for, or has acted in any manner whatsoever on behalf of, an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer;
(2) If the person served is a reinsurer who has at any time entered into a contract of reinsurance with an insurer against which a delinquency proceeding has been instituted, or is an agent or broker of or for the reinsurer, in any action on or incident to the reinsurance contract;
(3) If the person served is or has been an officer, director, manager, trustee, organizer, promoter or other person in a position of comparable authority or influence over an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer;
(4) If the person served is or was at the time of the institution of the delinquency proceeding against the insurer holding assets in which the receiver claims an interest on behalf of the insurer, in any action concerning the assets; or
(5) If the person served is obligated to the insurer in any way whatsoever, in any action on or incident to the obligation.
d. If the court on motion of any party finds that any action should as a matter of substantial justice be tried in a forum outside this State, the court may enter an appropriate order to stay further proceedings on the action in this State.
e. All actions authorized pursuant to this section shall be brought in the Superior Court.
L.1992,c.65,s.4.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-35 - Restraining orders, injunctions

17B:32-35. Restraining orders, injunctions
5. a. Any receiver appointed in a proceeding under this act may at any time apply for, and the Superior Court may grant, such restraining orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to prevent:
(1) The transaction of further business;
(2) The transfer of property;
(3) Interference with the receiver or with a proceeding under this act;
(4) Waste of the insurer's assets;
(5) Dissipation and transfer of bank accounts;
(6) The institution or further prosecution of any actions or proceedings;
(7) The obtaining of preferences, judgments, attachments, garnishments or liens against the insurer, its assets or its policyholders;
(8) The levying of execution against the insurer, its assets or its policyholders;
(9) The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;
(10) The withholding from the receiver of books, accounts, documents or other records relating to the business of the insurer; or
(11) Any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors or shareholders, or the administration of any proceeding under this act.
b. The receiver may apply to any court outside of this State for the relief described in subsection a. of this section.
c. Notwithstanding any provision of law to the contrary, the commencement of a delinquency proceeding with respect to an insurer-member shall not operate as a stay, injunction, or prohibition of exercise by a federal home loan bank of its rights regarding collateral pledged by that insurer-member.
L.1992, c.65, s.5; amended 2023, c.172, s.6.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-36 - Cooperation with commissioner in proceedings

17B:32-36. Cooperation with commissioner in proceedings
6. a. Any officer, manager, director, trustee, owner, employee or agent of any insurer, or any other person with authority over or in charge of any segment of the insurer's affairs, including any person who exercises control directly or indirectly over activities of the insurer through any holding company or other affiliate of the insurer, shall cooperate with the commissioner in any proceeding under this act or any investigation preliminary to the proceeding. The term "cooperate" shall include, but shall not be limited to, the following:
(1) Replying promptly in writing to any inquiry from the commissioner requesting such a reply; and
(2) Making available to the commissioner any books, accounts, documents, or other records or information or property of or pertaining to the insurer and in his possession, custody or control.
b. No person shall obstruct or interfere with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto.
c. This section shall not be construed to abridge any other existing legal rights, including the right to resist a petition for liquidation or other delinquency proceedings, or other orders.
d. Any person who fails to cooperate with the commissioner pursuant to subsection a. of this section, or who obstructs or interferes with the commissioner pursuant to subsection b. of this section, or who violates any order the commissioner issued validly under this act shall:
(1) Be subject to a civil penalty of not more than $10,000 or to imprisonment for not more than one year, or both; or
(2) After a hearing, be subject to an administrative penalty imposed by the commissioner of not more than $10,000 and to the revocation or suspension of any insurance licenses issued by the commissioner.
L.1992,c.65,s.6.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-37 - Proceedings previously commenced deemed commenced under this act; exceptions, distribution of claims

17B:32-37. Proceedings previously commenced deemed commenced under this act; exceptions, distribution of claims
7. a. Every proceeding heretofore commenced under the laws in effect before the enactment of this act shall be deemed to have been commenced under this act henceforth for all purposes and shall be governed by the provisions of this act, including, but not limited to, section 41 of this act, except that, in the discretion of the commissioner, the proceeding may be continued, in whole or in part, as it would have been continued had this act not been enacted.
b. Notwithstanding the provisions of subsection a. of this section and section 41 of this act to the contrary, one-half of the direct, non-contingent obligations incurred on or after August 9, 1991, which prior to May 4, 1992, the insurer in rehabilitation under the supervision of the commissioner as rehabilitator had stipulated were due, and which stipulation has been ordered by the court supervising pending delinquency proceedings, shall have a priority of distribution pursuant to section 41 of this act which is after Class 3 claims under paragraph (3) of subsection a. of section 41 of this act and before Class 4 claims under paragraph (4) of subsection a. of section 41 of this act.
L.1992,c.65,s.7.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-38 - Prohibitions relative to insurer subject to delinquency proceeding

17B:32-38. Prohibitions relative to insurer subject to delinquency proceeding
8. No insurer that is subject to any delinquency proceedings, whether administrative or judicial, shall:
a. Be released from that proceeding, unless that proceeding is converted into a judicial rehabilitation or liquidation proceeding;
b. Be permitted to solicit or accept new business or request or accept the restoration of any suspended or revoked license or certificate of authority;
c. Be returned to the control of its shareholders or private management; or
d. Have any of its assets returned to the control of its shareholders or private management until all payments of or on account of the insurer's contractual obligations by all guaranty associations, along with all expenses thereof and interest on all such payments and expenses, shall have been repaid to the guaranty associations or a plan of repayment by the insurer shall have been approved by the guaranty associations.
L.1992,c.65,s.8.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-39 - Filing of petition; court orders

17B:32-39. Filing of petition; court orders
9. a. The commissioner may file in the Superior Court of this State a petition alleging that, with respect to a domestic insurer:
(1) There exist any grounds that would justify a court order for a formal delinquency proceeding against an insurer under this act;
(2) The interests of policyholders, creditors or the public will be endangered by delay; and
(3) The contents of an order deemed necessary by the commissioner.
b. Upon a filing under subsection a. of this section, the court may issue forthwith, ex parte and without a hearing, the requested order which shall direct the commissioner to take possession and control of all or a part of the property, books, accounts, documents, and other records of an insurer, and of the premises occupied by it for transaction of its business; and until further order of the court enjoin the insurer and its officers, managers, agents, and employees from disposition of its property and from the transaction of its business except with the written consent of the commissioner.
c. The court shall specify in the order what its duration shall be, which shall be the time the court deems necessary for the commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may from time to time hold hearings it deems necessary after giving notice it deems appropriate, and may extend, shorten, or modify the terms of the seizure order. The court shall vacate the seizure order if the commissioner fails to commence a formal proceeding under this act after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this act shall ipso facto vacate the seizure order.
d. Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the insurer.
e. An insurer subject to an ex parte order under this section may petition the court at any time after the issuance of the order for a hearing and review of the order. The court shall hold a hearing and review not more than 15 days after the request. A hearing under this subsection may be held privately in chambers and it shall be held privately in chambers if requested by the insurer proceeded against.
f. If, at any time after the issuance of such an order, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given. An order that notice be given shall not stay the effect of any order previously issued by the court.
L.1992,c.65,s.9.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-40 - Confidentiality of documents, files, records, papers

17B:32-40. Confidentiality of documents, files, records, papers
10. In all proceedings and judicial reviews thereof under section 9 of this act, all records of the insurer, other documents, and all department files and court records and papers, so far as they pertain to or are a part of the record of the proceedings, shall be and remain confidential except as is necessary to obtain compliance therewith, unless and until the Superior Court, after hearing arguments from the parties in chambers, shall order otherwise; or unless the insurer requests that the matter be made public. Until such court order, all papers filed with the clerk of the Superior Court shall be held by him in a confidential file.
L.1992,c.65,s.10.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-42 - Appointment of rehabilitator

17B:32-42. Appointment of rehabilitator
12. a. An order to rehabilitate the business of a domestic insurer, or an alien insurer domiciled in this State, shall appoint the commissioner and his successors in office the rehabilitator, and shall direct the rehabilitator forthwith to take possession of the assets of the insurer, and to administer them under the general supervision of the court. The filing or recording of the order with the clerk of the Superior Court or recorder of deeds of the county in which the principal business of the company is conducted, or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale or other evidence of title duly filed or recorded with that recorder of deeds would have imparted. The order to rehabilitate the insurer shall by operation of law vest title to all assets of the insurer in the rehabilitator.
b. Any order issued under this section shall require accountings to the court by the rehabilitator. Accountings shall be at such intervals as the court specifies in its order, but no less frequently than semi-annually. Each accounting shall include a report concerning the rehabilitator's opinion as to the likelihood that a plan under subsection e. of section 13 of this act will be prepared by the rehabilitator and the timetable for doing so.
c. Entry of an order of rehabilitation shall not constitute an anticipatory breach of any contracts of the insurer nor shall it be grounds for retroactive revocation or retroactive cancellation of any contracts of the insurer, unless such revocation or cancellation is done by the rehabilitator pursuant to section 13 of this act.
L.1992,c.65,s.12.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-44 - Staying of pending actions

17B:32-44. Staying of pending actions
14. a. Any court in this State before which any action or proceeding in which the insurer is a party, or is obligated to defend a party, is pending when a rehabilitation order against the insurer is entered shall stay the action or proceeding for 90 days and such additional time as is necessary for the rehabilitator to obtain proper representation and prepare for further proceedings. The rehabilitator shall take such action respecting the pending litigation as he deems necessary in the interests of justice and for the protection of creditors, policyholders and the public. The rehabilitator shall immediately consider all litigation pending outside this State and shall petition the courts having jurisdiction over that litigation for stays whenever necessary to protect the estate of the insurer.
b. No statute of limitations or defense of laches shall run with respect to any action by or against an insurer between the filing of a petition for appointment of a rehabilitator for that insurer and the order granting or denying that petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the order of rehabilitation is entered. The rehabilitator may, upon an order for rehabilitation, within one year or such other longer time as applicable law may permit, institute an action or proceeding on behalf of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which such order is entered.
c. Any guaranty association or foreign guaranty association covering life or health insurance or annuities shall have standing to appear in any court proceeding concerning the rehabilitation of an insurer if that association is or may become liable to act as a result of the rehabilitation.
L.1992,c.65,s.14.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-45 - Petition for order of liquidation

17B:32-45. Petition for order of liquidation
15. a. Whenever the commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders or the public, or would be futile, the commissioner may petition the Superior Court for an order of liquidation. A petition under this subsection shall have the same effect as a petition under section 16 of this act. The Superior Court shall permit the directors of the insurer to take such actions as are reasonably necessary to defend against the petition and may order payment from the estate of the insurer of such costs and other expenses of defense as justice may require.
b. The protection of the interests of insureds, claimants and the public requires the timely performance of all insurance policy obligations. If the payment of policy obligations is suspended in substantial part for a period of 12 months at any time after the appointment of the rehabilitator and the rehabilitator has not filed an application for approval of a plan under subsection e. of section 13 of this act during the 12-month period, the rehabilitator shall petition the court for an order of liquidation on the grounds of insolvency; provided, however, that prior to the end of that 12-month period the commissioner may petition the court for an extension of the time period to file an application for approval of a plan.
c. The rehabilitator may at any time petition the Superior Court for an order terminating rehabilitation of an insurer. The court shall also permit the directors of the insurer to petition the court for an order terminating rehabilitation of the insurer and may order payment from the estate of the insurer of such costs and other expenses of that petition as justice may require. If the court finds that rehabilitation has been accomplished and that grounds for rehabilitation under section 11 of this act no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. The court may also make that finding and issue that order at any time upon its own motion.
L.1992,c.65,s.15.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-46 - Basis for order of liquidation

17B:32-46. Basis for order of liquidation
16. The commissioner may petition the Superior Court for an order directing him to liquidate a domestic insurer or an alien insurer domiciled in this State on the basis:
a. Of any ground for an order of rehabilitation as specified in section 11 of this act, whether or not there has been a prior order directing the rehabilitation of the insurer;
b. That the insurer is insolvent; or
c. That the insurer is in such condition that the further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors or the public.
L.1992,c.65,s.16.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-48 - Policies to continue in force

17B:32-48. Policies to continue in force
18. a. Policies of life or health insurance or annuities shall continue in force for such period and under such terms as is provided for by the guaranty association or any applicable foreign guaranty association.
b. Policies of life or health insurance or annuities or any period or coverage of those policies not covered by the guaranty association or a foreign guaranty association shall continue in force only for the lesser of:
(1) A period of 30 days from the date of entry of the liquidation orders;
(2) The expiration of the policy coverage;
(3) The date when the insured has replaced the insurance coverage with equivalent insurance in another insurer or otherwise terminated the policy;
(4) The liquidator has effected a transfer of the policy obligation pursuant to paragraph (9) of subsection a. of section 20 of this act; or
(5) The date proposed by the liquidator and approved by the court to cancel coverage.
An order for liquidation under section 17 of this act shall terminate coverages at the time specified in this subsection b. for purposes of any other law.
L.1992,c.65,s.18.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-49 - Petition for dissolution

17B:32-49. Petition for dissolution
19. The commissioner may petition for an order dissolving the corporate existence of a domestic insurer, or the United States branch of an alien insurer domiciled in this State, at the time he applies for a liquidation order. The court shall order dissolution of the corporation upon petition by the commissioner upon or after the granting of a liquidation order. If the dissolution has not previously been ordered, it shall be effected by operation of law upon the discharge of the liquidator if the insurer is insolvent but may be ordered by the court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason.
L.1992,c.65,s.19.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-51 - Notice of liquidation order

17B:32-51. Notice of liquidation order
21. a. Unless the court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible:
(1) By first class mail and either by telegram or telephone to the commissioner or insurance regulator of each jurisdiction in which the insurer is doing business;
(2) By first class mail to the guaranty association and any foreign guaranty association which is or may become obligated as a result of the liquidation;
(3) By first class mail to all insurance agents of the insurer;
(4) By first class mail to all persons known or reasonably expected to have claims against the insurer, including all policyholders, at their last known address as indicated by the records of the insurer; and
(5) By publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in such other locations as the liquidator deems appropriate.
b. Except as otherwise established by the liquidator with approval of the court, notice to potential claimants under subsection a. of this section shall require claimants to file with the liquidator their claims, together with proper proofs thereof under section 35 of this act, on or before a date the liquidator shall specify in the notice. The liquidator need not require persons claiming cash surrender values or other investment values in life insurance and annuities to file a claim. All claimants shall have a duty to keep the liquidator informed of any changes of address.
c. (1) Notice under subsection a. of this section to agents of the insurer and to potential claimants who are policyholders shall include, where applicable, notice that coverage by state guaranty associations may be available for all or part of policy benefits in accordance with applicable state guaranty association laws.
(2) The liquidator shall promptly provide to the guaranty associations such information concerning the identities and addresses of policyholders and their policy coverages as may be within the liquidator's possession or control, and otherwise cooperate with guaranty associations to assist them in providing to those policyholders timely notice of the guaranty associations' coverage of policy benefits, including, as applicable, coverage of claims and continuation or termination of coverages.
d. If notice is given in accordance with this section, the distribution of assets of the insurer under this act shall be conclusive with respect to all claimants, whether or not they received notice.
L.1992,c.65,s.21.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-52 - Provision of information to liquidator by agents, licensing affected

17B:32-52. Provision of information to liquidator by agents, licensing affected
22. a. Every person who receives notice, in the form prescribed in section 21 of this act, that an insurer which he represents as an agent is the subject of a liquidation order, shall within 30 days of such notice provide to the liquidator, in addition to the information he may be required to provide pursuant to section 6 of this act, the information in the agent's records related to any policy issued by the insurer through the agent, and, if the agent is a general agent, the information in the general agent's records related to any policy issued by the insurer through an agent under contract to him, including the name and address of such subagent. A policy shall be deemed issued through an agent if the agent has a property interest in the expiration of the policy, or if the agent has had in his possession a copy of the declarations of the policy at any time during the life of the policy, except where the ownership of the expiration of the policy has been transferred to another.
b. The commissioner may refuse to renew a license, or may suspend or revoke a license, if he finds after notice and an opportunity for a hearing that an agent has failed to provide information to the liquidator as required in subsection a. of this section. In addition or an alternative to any other penalty, the commissioner may, after a hearing, impose an administrative penalty of not more than $10,000 for each violation of this section.
L.1992,c.65,s.22.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-53 - Actions against or by insurer, liquidator

17B:32-53. Actions against or by insurer, liquidator
23. a. Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in this State, no action at law or equity or in arbitration shall be brought against the insurer or liquidator, whether in this State or elsewhere, nor shall any such existing actions be maintained or further presented after issuance of that order. The courts of this State shall give full faith and credit to injunctions against the liquidator or the insurer or the continuation of existing actions against the liquidator or the insurer, when those injunctions are included in an order to liquidate an insurer issued pursuant to corresponding provisions in other states. Whenever, in the liquidator's judgment, protection of the estate of the insurer necessitates intervention in an action against the insurer that is pending outside this State, he may intervene in the action. The liquidator may defend any action in which he intervenes under this section at the expense of the estate of the insurer.
b. The liquidator may, upon or after an order for liquidation, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which that order is entered. If, by any agreement, a period of limitation is fixed for instituting an action or proceeding upon any claim, or for filing any claim, proof of claim, proof of loss, demand, notice or the like, or if in any proceeding, judicial or otherwise, a period of limitation is fixed, either in the proceeding or by applicable law, for taking any action, filing any claim or pleading, or doing any act, and if in any such case the period had not expired at the date of the filing of the petition, the liquidator may, for the benefit of the estate, take any such action or do any such act, required of or permitted to the insurer, within a period of 180 days subsequent to the entry of an order for liquidation, or within any further period as is shown to the satisfaction of the court not to be unfairly prejudicial to the other party.
c. No statute of limitation or defense of laches shall run with respect to any action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition.
d. Any guaranty association or foreign guaranty association shall have standing to appear in any court proceeding concerning the liquidation of an insurer if such association is or may become liable to act as a result of the liquidation.
L.1992,c.65,s.23.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-54 - Preparation of list of insurer's assets

17B:32-54. Preparation of list of insurer's assets
24. a. As soon as practicable after the liquidation order but not later than 120 days thereafter, the liquidator shall prepare in duplicate a list of the insurer's assets. The list shall be amended or supplemented from time to time as the liquidator may determine. One copy shall be filed in the office of the clerk of the Superior Court and one copy shall be retained for the liquidator's files. All amendments and supplements shall be similarly filed.
b. The liquidator shall reduce the assets to a degree of liquidity that is consistent with the effective execution of the liquidation.
c. A submission to the court for disbursement of assets in accordance with section 33 of this act fulfills the requirements of subsection a. of this section.
L.1992,c.65,s.24.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-56 - Transfer of real property deemed valid

17B:32-56. Transfer of real property deemed valid
26. a. After a petition for rehabilitation or liquidation has been filed, but before an order of rehabilitation or liquidation is granted, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value; or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred. The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the recorder of deeds in the county where any real property in question is located. The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state shall not be impaired by the pendency of such a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale.
b. After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:
(1) A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value; or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred.
(2) A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part thereof, to the insurer or upon his order, with the same effect as if the petition were not pending.
(3) A person having actual knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith pursuant to the provisions of this section.
(4) A person asserting the validity of a transfer under this section shall have the burden of proof. Except as elsewhere provided in this section, no transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall be valid against the liquidator.
c. Every director, officer, employee, stockholder, policyholder and any other person acting on behalf of the insurer who is concerned in any fraudulent transfer, and every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under subsection a. of this section shall be personally liable therefor and shall be bound to account to the liquidator.
d. Nothing in this act shall impair the negotiability of currency or negotiable instruments.
L.1992,c.65,s.26.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-58 - Claims of creditor

17B:32-58. Claims of creditor
28. a. No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment or encumbrance voidable under this act, shall be allowed unless he surrenders the preference, lien, conveyance, transfer, assignment or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim shall not be allowed unless the money is paid or the property is delivered to the liquidator within 30 days from the date of the entering of the final judgment, except that the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding.
b. A claim allowable under subsection a. of this section by reason of the avoidance, whether voluntary or involuntary, of a preference, lien, conveyance, transfer, assignment or encumbrance, may be filed as an excused last filing under section 34 of this act if filed within 30 days from the date of the avoidance, or within the further time allowed by the court under subsection a. of this section.
L.1992,c.65,s.28.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-60 - Report by liquidator

17B:32-60. Report by liquidator
30. a. As soon as practicable, but not more than two years from the date of an order of liquidation under section 17 of this act of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth:
(1) The reasonable value of the assets of the insurer;
(2) The insurer's probable total liabilities;
(3) The probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment; and
(4) A recommendation as to whether or not an assessment should be made and in what amount.
b. (1) Upon the basis of the report provided in subsection a. of this section, the Superior Court may levy one or more assessments against all members of the insurer who are subject to assessment.
(2) Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration, and the estimated cost of collection of the assessment, exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically.
c. After levy of assessment under subsection b. of this section, the liquidator shall issue an order directing each member who has not paid the assessment pursuant to the order, to show cause why the liquidator should not pursue a judgment therefor.
d. The liquidator shall give notice of the order to show cause by publication and by first class mail to each member liable thereunder mailed to his last known address as it appears on the insurer's records, at least 20 days before the return day of the order to show cause.
e. (1) If a member does not appear and serve duly verified objections upon the liquidator on or before the return day of the order to show cause under subsection c. of this section, the court shall make an order adjudging the member liable for the amount of the assessment against him pursuant to subsection c. of this section, together with costs, and the liquidator shall have a judgment against the member therefor.
(2) If on or before such return day, the member appears and serves duly verified objections upon the liquidator, the commissioner may hear and determine the matter or may appoint a referee to hear it and make such order as the facts warrant. In the event that the commissioner determines that such objections do not warrant relief from assessment, the member may request the court to review the matter and vacate the order to show cause.
f. The liquidator may enforce any order or collect any judgment under subsection e. of this section by any lawful means.
L.1992,c.65,s.30.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-61 - Amount recoverable not affected by delinquency proceedings

17B:32-61. Amount recoverable not affected by delinquency proceedings
31. The amount recoverable by the liquidator from reinsurers shall not be reduced as a result of the delinquency proceedings, regardless of any provision in the reinsurance contract or other agreement. Payment made directly to an insured or other creditor shall not diminish the reinsurer's obligation to the insurer's estate except when the reinsurance contract provided for direct coverage of a named insured and the payment was made in discharge of that obligation.
L.1992,c.65,s.31.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-62 - Payment of unpaid premium, violations; penalties; appeals

17B:32-62. Payment of unpaid premium, violations; penalties; appeals
32. a. (1) An agent, broker, premium finance company, or any other person, other than the insured, responsible for the payment of a premium shall be obligated to pay any unpaid premium for the full policy term due the insurer at the time of the declaration of insolvency, whether earned or unearned, as shown on the records of the insurer. The liquidator shall also have the right to recover from such person any part of an unearned premium that represents commission of such person. Credits or setoffs or both shall not be allowed to an agent, broker or premium finance company for any amounts advanced to the insurer by the agent, broker or premium finance company on behalf of, but in the absence of a payment by, the insured.
(2) An insured shall be obligated to pay any unpaid earned premium due the insurer, as shown on the records of the insurer, at the time of the declaration of insolvency.
b. Upon satisfactory evidence of a violation of this section, the commissioner may pursue either one or both of the following courses of action:
(1) Suspend or revoke or refuse to renew the licenses of such offending party or parties.
(2) After a hearing, impose an administrative penalty of not more than $10,000 for each violation of this section.
c. Before the commissioner takes any action as set forth in subsection b. of this section, he shall give written notice to the person, company, association or exchange accused of violating the law, stating specifically the nature of the alleged violation; and fixing a time and place, at least 10 days thereafter, when a hearing on the matter shall be held. After that hearing, or upon failure of the accused to appear at the hearing, the commissioner, if he shall find a violation, shall impose those penalties under subsection b. of this section as he deems advisable.
d. When the commissioner takes action in any or all of the ways set out in subsection b. of this section, the party aggrieved may appeal from that action to the Superior Court.
L.1992,c.65,s.32.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-64 - Filing of proof of claims

17B:32-64. Filing of proof of claims
34. a. Proof of all claims shall be filed with the liquidator in the form required by section 35 of this act on or before the last day for filing specified in the notice required under section 21 of this act, except that proof of claims for cash surrender values or other investment values in life insurance and annuities need not be filed unless the liquidator expressly so requires.
b. The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if he were not late, to the extent that any such payment will not prejudice the orderly administration of the liquidation, under the following circumstances:
(1) The existence of the claim was not known to the claimant and he filed his claim as promptly thereafter as reasonably possible after learning of it;
(2) A transfer to a creditor was avoided under sections 25 through 27 of this act, or was voluntarily surrendered under section 28 of this act, and that the filing satisfies the conditions of section 28 of this act;
(3) The valuation under section 40 of this act, of any security held by a secured creditor shows a deficiency, which is filed within 30 days after the valuation; and
c. The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if they are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing if those payments were made and expenses incurred as provided by law.
d. The liquidator may consider any claim filed late which is not covered by subsection b. of this section, and permit it to receive distributions which are subsequently declared on any claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The late-filing claimant shall receive, at each distribution, the same percentage of the amount allowed on his claim as is then being paid to claimants of any lower priority. This shall continue until his claim has been paid in full.
L.1992,c.65,s.34.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-65 - Statement to proof of claim

17B:32-65. Statement to proof of claim
35. a. Proof of claim shall consist of a statement signed by the claimant that includes all of the following that are applicable:
(1) The particulars of the claim including the consideration given for it;
(2) The identity and amount of the security on the claim;
(3) The payments made on the debt, if any;
(4) That the sum claimed is justly owing and that there is no setoff, counterclaim or defense to the claim;
(5) Any right of priority of payment or other specific right asserted by the claimants;
(6) A copy of the written instrument which is the foundation of the claim; and
(7) The name and address of the claimant and the attorney who represents him, if any.
b. No claim need be considered or allowed if it does not contain all the information in subsection a. of this section which may be applicable. The liquidator may require that a prescribed form be used, and may require that other information and documents be included.
c. At any time the liquidator may request the claimant to present information or evidence supplementary to that required under subsection a. of this section and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence.
d. No judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation, and no judgment or order against an insured or the insurer entered at any time by default or by collusion need be considered as evidence of liability or of quantum of damages. No judgment or order against an insured or the insurer entered within four months before the filing of the petition need be considered as evidence of liability or of the quantum of damages.
e. All claims of a guaranty association or foreign guaranty association shall be in such form and contain such substantiation as may be agreed to by the association and the liquidator.
L.1992,c.65,s.35.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-66 - Contingent, absolute, limited claims

17B:32-66. Contingent, absolute, limited claims
36. a. A claim may be allowed even if contingent, if it is filed in accordance with section 34 of this act. It may be allowed and may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation.
b. Claims that are due except for the passage of time shall be treated as absolute claims are treated, except that such claims may be discounted at a rate of interest determined by the commissioner.
c. Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of any order of rehabilitation or liquidation under section 12 or 17 of this act.
L.1992,c.65,s.36.
2023 New Jersey Revised Statutes › Title 17B - Insurance › Section 17B:32-67 - Third party, insured claims

17B:32-67. Third party, insured claims
37. a. Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator.
b. Whether or not the third party files a claim, the insured may file a claim on its own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within 60 days after mailing of the notice required by section 21 of this act, whichever is later, he is an unexcused late filer.
c. The liquidator shall make his recommendations to the court under section 42 of this act, for the allowance of an insured's claim under subsection b. of this section after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, he shall reconsider the claim on the basis of additional information and amend his recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. The court may amend its allowance as it deems appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of: (1) the amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense, or (2) the amount allowed on the claims by the court.
After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection shall not be a reason for unreasonable delay of final distribution and discharge of the liquidator.
d. If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in subsection c. of this section. If any insured's claim is subsequently reduced under subsection c., the amount thus freed shall be apportioned ratably among the claims which have been reduced under this subsection.
e. No claim may be presented under this section if it is or may be covered by any guaranty association or foreign guaranty association.
L.1992,c.65,s.37.