reglab/statecodes huggingface dataset:
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-304 - Rehabilitation order - Stay of pending action or proceeding - Tolling of statute of limitations - Laches unavailable - Standing - Federal home loan bank

(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 ninety (90) days and any 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 the rehabilitator 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 sixty (60) days after the order of rehabilitation is entered or the petition is denied. The rehabilitator may, upon an order for rehabilitation, within one (1) 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 the order is entered.
(c)
Any guaranty association or foreign guaranty association covering life or health insurance or annuities has standing to appear in any court proceeding concerning the rehabilitation of a life or health insurer if the association is or may become liable under this chapter as a result of the rehabilitation.
(d)
Notwithstanding subsections (a) and (b) and any other provision of this title, a federal home loan bank shall not be stayed, enjoined, or prohibited from exercising or enforcing any right or cause of action regarding collateral pledged under a security agreement or under any pledge agreement, security agreement, collateral agreement, or other similar arrangement or credit enhancement relating to a security agreement to which the federal home loan bank is a party.
Amended by 2019 Tenn. Acts, ch. 430,s 3, eff. 5/21/2019.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-305 - Order of liquidation - Termination of rehabilitation

(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 chancery court of Davidson County for an order of liquidation. A petition under this subsection (a) shall have the same effect as a petition under §
56-9-306
. The chancery court of Davidson County shall permit the directors of the insurer to take actions as are reasonably necessary to defend against the petition and may order payment from the estate of the insurer of the 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 six (6) months at any time after the appointment of the rehabilitator, and the rehabilitator has not filed an application for approval of a plan under §
56-9-303(e)
, the rehabilitator shall petition the court for an order of liquidation on grounds of insolvency.
(c)
The rehabilitator may at any time petition the chancery court of Davidson County 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 the petition as justice may require. If the chancery court of Davidson County finds that rehabilitation has been accomplished and that grounds for rehabilitation under §
56-9-301
no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. The chancery court of Davidson County may also make that finding and issue that order at any time upon its own motion.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-306 - Grounds for order of liquidation

The commissioner may petition the chancery court of Davidson County for an order directing the commissioner to liquidate a domestic insurer or an alien insurer domiciled in this state on the basis:
(1)
Of any ground for an order of rehabilitation as specified in §
56-9-301
, whether or not there has been a prior order directing the rehabilitation of the insurer;
(2)
That the insurer is insolvent; or
(3)
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.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-308 - Liquidation order - Continuation or termination of insurance policies

(a)
All policies, including bonds and other noncancellable business, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation, shall continue in force only for the lesser of:
(1)
A period of thirty (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 date when the liquidator has effected a transfer of the policy obligation pursuant to §
56-9-310(a)(10)
; or
(5)
The date proposed by the liquidator and approved by the court to cancel coverage.
(b)
An order of liquidation under §
56-9-307
shall terminate coverage at the time specified in subsection (a) for purposes of any other statute.
(c)
Policies of life or health insurance or annuities shall continue in force for the period and under the terms that are provided for by any applicable guaranty association or foreign guaranty association.
(d)
Policies of life or health insurance or annuities or any period of coverage of the policies not covered by a guaranty association or foreign guaranty association shall terminate under subsections (a) and (b).
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-309 - Liquidation of insurer - Dissolution of corporate existence

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 the commissioner 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.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-311 - Notice of liquidation order - Method - Contents - Effect of notice

(a)
Unless the court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible by:
(1)
First class mail and either telegram or telephone to the insurance commissioner of each jurisdiction in which the insurer is doing business;
(2)
First class mail to any guaranty association or foreign guaranty association that is or may become obligated as a result of the liquidation;
(3)
First class mail to all insurance agents of the insurer;
(4)
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)
Publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in any other locations the liquidator deems appropriate.
(b)
Except as otherwise established by the liquidator with approval of the court, notice to potential claimants under subsection (a) shall require claimants to file with the liquidator their claims, together with proper proofs under §
56-9-324
, 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) 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 laws.
(2)
The liquidator shall promptly provide to the guaranty associations any information concerning the identities and addresses of the 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 the 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 chapter shall be conclusive with respect to all claimants, whether or not they received notice.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-312 - Notice of liquidation order - Response by agents of insurer - Penalty for failure to respond

(a)
(1)
Every person who receives notice in the form prescribed in §
56-9-311
that an insurer that the person represents as an agent is the subject of a liquidation order shall, within thirty (30) days of the notice, provide to the liquidator, in addition to the information the person may be required to provide pursuant to §
56-9-106
, 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 the general agent, including the name and address of the subagent.
(2)
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 the agent's 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)
Any agent failing to provide information to the liquidator as required in subsection (a) may be subject to payment of a penalty of not more than one thousand dollars ($1,000) and may have the agent's licenses suspended, the penalty to be imposed after a hearing held by the commissioner.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-314 - List of insurer's assets - Where filed - Liquidation of assets

(a)
As soon as practicable after the liquidation order, but not later than one hundred twenty (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 (1) copy shall be filed in the office of the clerk of the chancery court of Davidson County and one (1) 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 §
56-9-322
fulfills the requirements of subsection (a).
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-316 - Transfers of property after filing of petition for rehabilitation or liquidation - Effect

(a)
(1)
After a petition for rehabilitation or liquidation has been filed, 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.
(2)
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.
(3)
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)
(1)
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:
(A)
A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith is 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;
(B)
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 of the property, to the insurer or upon the insurer's order, with the same effect as if the petition were not pending;
(C)
A person having actual knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith; and
(D)
A person asserting the validity of a transfer under this section has the burden of proof.
(2)
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 person receiving any property from the insurer or any benefit that is a fraudulent transfer under subsection (a) is personally liable therefor and is bound to account to the liquidator.
(d)
Nothing in this chapter impairs the negotiability of currency or negotiable instruments.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-318 - Claims of creditors

(a)
No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment or encumbrance voidable under this chapter shall be allowed unless the creditor 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 thirty (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) by reason of the avoidance, whether voluntary or involuntary, or a preference, lien, conveyance, transfer, assignment or encumbrance, may be filed as an excused late filing under §
56-9-323
, if filed within thirty (30) days from the date of the avoidance, or within the further time allowed by the court under subsection (a).
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-319 - Mutual debts and credits - When offset allowed

(a)
In all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this chapter, the credits and debts shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b).
(b)
No offset shall be allowed in favor of any such person where:
(1)
The obligation of the insurer to the person would not, at the date of the entry of any liquidation order or otherwise, as provided in this chapter, entitle the person to share as a claimant in the assets of the insurer;
(2)
The obligation of the insurer to the person was purchased by or transferred to the person with a view of its being used as an offset; or
(3)
The obligation of the person is to pay an assessment levied against the subscribers of a reciprocal insurer, or is to pay a balance upon the subscription to the capital stock of a stock insurer.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-320 - Assessment - Liquidator to make report to court - Levy of assessment on members of insurer - Enforcement

(a)
As soon as practicable, but not more than two (2) years from the date of an order of liquidation under §
56-9-307
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), including any supplements and amendments thereto, the chancery court of Davidson County may levy one (1) 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), 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 the member's last known address as it appears on the insurer's records, at least twenty (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), the court shall make an order adjudging the member liable for the amount of the assessment against the member pursuant to subsection (c), together with costs, and the liquidator shall have a judgment against the member therefor.
(2)
If, on or before the 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 the order as the facts warrant. In the event that the commissioner determines that the 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) by any lawful means.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-323 - Proof of claims - When filed - Late filings

(a)
Proof of all claims shall be filed with the liquidator in the form required by §
56-9-324
, on or before the last day for filing specified in the notice required under §
56-9-311
, 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 the claimant 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 the claimant filed the claimant's claim as promptly as reasonably possible after learning of it;
(2)
A transfer to a creditor was avoided under §§
56-9-315
- 56-9-317, or was voluntarily surrendered under §
56-9-318
, and that the filing satisfies the conditions of §
56-9-318
; and
(3)
The valuation under §
56-9-329
of security held by a secured creditor shows a deficiency, which is filed within thirty (30) days after the valuation.
(c)
The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if the claims 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 where the payments were made and expenses incurred as provided by law.
(d)
The liquidator may consider any claim filed late that is not covered by subsection (b), and permit it to receive distributions that 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 the claimant's claim as is then being paid to claimants of any lower priority. This shall continue until the claimant's claim has been paid in full.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-324 - Proof of claim - Form - Information to be included in form

(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 claimant;
(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 the claimant, if any.
(b)
No claim need be considered or allowed if it does not contain all the information in subsection (a) that 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) 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 the quantum of damages. No judgment or order against an insured or the insurer entered within four (4) 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 the form and contain the substantiation that may be agreed to by the association and the liquidator.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-325 - Contingent claims - Claims made under employment contracts

(a)
The claim of a third party which is contingent only on the third party's first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency.
(b)
A claim may be allowed even if contingent, if it is filed in accordance with §
56-9-323
. 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.
(c)
Claims that are due except for the passage of time shall be treated as absolute claims are treated, except that the claims may be discounted at the legal rate of interest.
(d)
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 §
56-9-302
or §
56-9-307
.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-327 - Denial of claim by liquidator - Notice - Hearing - Final disposition - Rules of procedure

(a)
When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or the claimant's attorney by first class mail at the address shown in the proof of claim. Within thirty (30) days from the mailing of the notice, the claimant may file objections with the liquidator. Any filed objections shall clearly set out all facts and the legal basis, if any, for the objections and the reasons why the claim should be allowed. If no such filing is made, the determination is final.
(b)
Whenever objections are filed with the liquidator and the liquidator does not alter the determination of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant or the claimant's attorney and to any other persons directly affected, not less than ten (10) nor more than thirty (30) days before the date of the hearing. The matter may be heard by the court or by a court-appointed referee. The hearing shall be conducted on the record in an informal manner and the formal rules of evidence and civil procedure need not be strictly applied. Hearings shall be held without a jury. Prehearing discovery shall be limited to the pretrial discovery as expressly permitted in arbitration proceedings under title 29, chapter 5.
(c)
When a disputed claim is heard by a referee, the referee shall submit written findings of fact and conclusions of law, together with the recommendation for disposition to the court. The referee's recommendation shall become the final judgment of the court, unless objections to the referee's recommendation are filed by the liquidator or a claimant with the court within fifteen (15) days after the recommendation is mailed to the liquidator and claimant.
(d)
The final disposition by the court of a disputed claim, whether after a hearing by the court or after a recommendation by a referee, shall be deemed a final judgment for purposes of appeal.
(e)
The courts of this state may make special rules of procedure for disputed claims, if such rules are not inconsistent with this chapter.
Acts 1991, ch. 142, § 4; 1999, ch. 348, § 2.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-328 - Claims of creditors secured by undertakings of other persons

(a)
Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person fails to prove and file that claim, the other person may do so in the creditor's name, and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that the other person discharges the undertaking.
(b)
(1)
In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution, however, until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor.
(2)
Any excess received by the creditor shall be held by the creditor in trust for such other person.
(c)
"Other person," as used in this section, is not intended to apply to a guaranty association or foreign guaranty association.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-329 - Valuation of security held by secured creditors

(a)
The value of any security held by a secured creditor shall be determined in one (1) of the following ways, as the court may direct:
(1)
By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to the creditors; or
(2)
By agreement, arbitration, compromise or litigation between the creditor and the liquidator.
(b)
The determination shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim, and any deficiency shall be treated as an unsecured claim. If the claimant surrenders the claimant's security to the liquidator, the entire claim shall be allowed as if unsecured.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-331 - Liquidator's report on claims - Review of report by court - When liquidator may treat claims as allowed

(a)
The liquidator shall review all claims duly filed in the liquidation and shall make further investigation as the liquidator deems necessary. The liquidator may compound, compromise or in any other manner negotiate the amount for which claims will be recommended to the court, except where the liquidator is required by law to accept claims as settled by any person or organization, including any guaranty association or foreign guaranty association. Unresolved disputes shall be determined under §
56-9-327
. As soon as practicable, the liquidator shall present to the court a report of the claims against the insurer with the liquidator's recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment value and the amounts owed.
(b)
The court may approve, disapprove or modify the report on claims by the liquidator. Such reports as are not modified by the court within a period of sixty (60) days following submission by the liquidator shall be treated by the liquidator as allowed claims, subject thereafter to later modification or to rulings made by the court pursuant to §
56-9-327
. No claim under a policy of insurance shall be allowed for an amount in excess of the applicable policy limits.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-332 - Payment of distributions by liquidator

Under the direction of the court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-333 - Unclaimed funds - Disposition

(a)
All unclaimed funds subject to distribution remaining in the liquidator's hands when the liquidator is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member or other person who is unknown or cannot be found, shall be deposited with the state treasurer, and shall be paid without interest to the person entitled thereto or that person's legal representative upon proof satisfactory to the state treasurer of the person's right thereto. Any amount on deposit not claimed within six (6) years from the discharge of the liquidator shall be deemed to have been abandoned and shall be escheated without formal escheat proceedings and be deposited with the general fund. Alternatively, the liquidator may elect to apply to the court for authority to hold the unclaimed funds subject to distribution for a period of two (2) years. Thereafter, any unclaimed funds may be distributed to approved claimants who have previously received a distribution, if it is economically feasible for the liquidator to make the distribution, or the liquidator may apply to the court for permission for the funds to be held by the commissioner for the purpose of defraying the costs and expenses of administration of other insolvent insurers for which there are insufficient assets to fund the costs and expenses of administration. With the approval of the supervising court, the liquidator may deposit unclaimed and withheld funds into a segregated account to be known as the closed estate fund, hereinafter the "fund." The commissioner may thereafter use moneys held in the account to fund the administrative expenses of proceedings against persons subject to this chapter that lack sufficient assets to fund administration. The commissioner shall maintain complete records with respect to all transactions involving the fund and shall prepare an annual accounting of the fund subject to audit by the comptroller of the treasury. If subsequent to disbursement of moneys from the fund, assets of the person become available to fund administration, the fund shall be reimbursed before other administrative expenses are paid.
(b)
All funds withheld under this chapter as a special claim and not distributed shall upon discharge of the liquidator be deposited with the state treasurer and paid in accordance with a priority of distribution of claims established by the liquidator. Any sums remaining that would revert to the undistributed assets of the insurer shall be transferred to the state treasurer and become the property of the state under subsection (a), unless the commissioner in the commissioner's discretion petitions the court to reopen the liquidation.
Acts 1991, ch. 142, § 4; 1999, ch. 348, § 3.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-334 - Application for order of discharge

(a)
When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any remaining funds that are uneconomic to distribute, as may be deemed appropriate.
(b)
Any other person may apply to the court at any time for an order under subsection (a). If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorney's fee.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-335 - Post-liquidation and discharge proceedings

After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may at any time petition the chancery court of Davidson County to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-336 - Records of insurer

Whenever it appears to the commissioner that the records of any insurer in process of liquidation, or completely liquidated, are no longer useful, the commissioner may recommend to the court, and the court shall direct, what records should be retained for future reference and what should be destroyed.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 3 - FORMAL PROCEEDINGS (§§ 56-9-301 — 56-9-339) › Section 56-9-337 - Books of receivership - Audit

The chancery court of Davidson County may, as it deems desirable, cause audits to be made of the books of the commissioner relating to any receivership established under this chapter, and a report of each audit shall be filed with the commissioner and with the court. The books, records and other documents of the receivership shall be made available to the auditor at any time without notice. The expense of each audit shall be considered a cost of administration of the receivership.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 4 - INTERSTATE RELATIONS (§§ 56-9-401 — 56-9-410) › Section 56-9-402 - Application by commissioner to liquidate assets of foreign or alien insurer - Grounds - Notice to insurer - Issuance of order by court - Receiver - Payment of claims after liquidation

(a)
If no domiciliary receiver has been appointed, the commissioner may apply to the chancery court of Davidson County by verified petition for an order directing the commissioner to liquidate the assets found in this state of a foreign insurer or an alien insurer not domiciled in this state, on any of the following grounds:
(1)
Any of the grounds in §
56-9-301
or §
56-9-306
; or
(2)
Any of the grounds specified in §
56-9-401(a)(2)-(4)
.
(b)
When an order is sought under subsection (a), the court shall cause the insurer to be given the notice and time to respond thereto as is reasonable under the circumstances.
(c)
If it appears to the court that the best interests of creditors, policyholders and the public so require, the court may issue an order to liquidate in whatever terms it deems appropriate. The filing or recording of the order with the clerk of the chancery court of Davidson County, or the recorder of deeds of the county in which the principal business of the company is located 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.
(d)
(1)
If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section, the liquidator under this section shall thereafter act as ancillary receiver under §
56-9-404
.
(2)
If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section, the liquidator under this section may petition the court for permission to act as ancillary receiver under §
56-9-404
.
(e)
On the same grounds as are specified in subsection (a), the commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer's assets and business over which the court will exercise jurisdiction, or any lesser part that the commissioner deems desirable for the protection of the policyholders and creditors in this state.
(f)
The court may order the commissioner, when the commissioner has liquidated the assets of a foreign or alien insurer under this section, to pay claims of residents of this state against the insurer under such rules as to the liquidation of insurers under this chapter as are otherwise compatible with this section.
Acts 1991, ch. 142, § 4.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 9 - INSURERS REHABILITATION AND LIQUIDATION ACT (§§ 56-9-101 — 56-9-511) › Part 4 - INTERSTATE RELATIONS (§§ 56-9-401 — 56-9-410) › Section 56-9-403 - Title to insurer's property - When title vests - Claims

(a)
(1)
The domiciliary liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under §
56-9-404(c)
, be vested by operation of law with the title to all of the assets, property, contracts and rights of action, agents, balances, and all of the books, accounts and other records of the insurer located in this state.
(2)
The date of vesting is the date of the filing of the petition, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting is the date of entry of the order directing possession to be taken.
(3)
The domiciliary liquidator has the immediate right to recover balances due from agents and to obtain possession of the books, accounts and other records of the insurer located in this state. The domiciliary liquidator also has the right to recover all other assets of the insurer located in this state, subject to §
56-9-404
.
(b)
(1)
If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the commissioner of this state shall be vested by operation of law with the title to all of the property, contracts and right of action, and all of the books, accounts and other records of the insurer located in this state, at the same time that the domiciliary liquidator is vested with title in the domicile.
(2)
The commissioner of this state may petition for a conservation or liquidation order under §
56-9-401
or §
56-9-402
, or for an ancillary receivership under §
56-9-404
, or, after approval by the chancery court of Davidson County, may transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require.
(c)
Claimants residing in this state may file claims with the liquidator or ancillary receiver, if any, in this state or with the domiciliary liquidator, if the domiciliary law permits. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceedings.
Acts 1991, ch. 142, § 4.