2016 Connecticut General Statutes
Title 38a - Insurance
Chapter 697 - General Provisions
Section 38a-18 - (Formerly Sec. 38-9). Application by commissioner to act as receiver.
(a) Whenever any domestic insurance company or corporation under the supervision of the commissioner: (1) Is insolvent; (2) has refused to submit its books, papers, accounts or affairs to the reasonable inspection of the commissioner, his actuary or examiner; (3) has permitted its capital to fall below the limits specified in either section 38a-72 or its charter, has failed to restore any deficiency within the time prescribed by subsection (d) of section 38a-71, or has failed to observe any other order of the commissioner authorized by statute; (4) has, by contract of reinsurance or otherwise, transferred or attempted to transfer substantially its entire property or business, or entered into any transaction the effect of which is to merge substantially its entire property or business in the property or business of any other company, corporation or association, without having first obtained the written approval of the commissioner; (5) is found, after an examination, to be in such condition that its further transaction of business will be hazardous to its policyholders or to its creditors or to the public; (6) has wilfully violated its charter or any law of the state; (7) whenever any officer or director of such company has refused to be examined under oath concerning its affairs; or (8) if such company is organized under the laws relating to assessment companies, its condition is found, after examination, to be such that it could not meet the lawful requirements for incorporation and authorization, the commissioner may, the Attorney General representing him, apply to the superior court or any judge thereof for the judicial district in which the principal office of such company is located, for an order directing such company to show cause why the commissioner should not take possession of its property and conduct its business, and for such other relief as the nature of the case and the interests of its policyholders, creditors and stockholders or the public may require.
(b) Whenever it appears to the commissioner that any of the conditions set forth in subsection (a) of this section exists or that irreparable loss and injury to the property or business of any insurance company has occurred or may occur unless the commissioner so acts immediately, the commissioner, without notice and before applying to the court for any order, forthwith shall take possession of the property, business, books, records and accounts of such company, and of the offices and premises occupied by it for the transaction of its business, and retain possession subject to the order of the court. Any person having possession of, and refusing to deliver, any of the books, records or assets of a company against whom a seizure order has been issued by the commissioner shall be fined not more than one thousand dollars, or imprisoned not more than one year, or both.
(c) Whenever the commissioner makes any seizure as provided in subsection (b) of this section, the chief of police for the town or municipality in which the principal office of the company is located, and the Commissioner of Emergency Services and Public Protection, shall, on demand of the commissioner, furnish him with such patrolmen, troopers or officers as may be necessary in enforcing or effecting any such seizure. Not more than fifteen days after making any seizure, the commissioner shall institute a proceeding under subsection (a) of this section, returnable not less than twelve or more than thirty days after the service thereof.
(1949 Rev., S. 6035; 1957, P.A. 448, S. 44; 1967, P.A. 518; 1971, P.A. 179, S. 24; P.A. 77-614, S. 486, 610; P.A. 78-280, S. 2, 127; P.A. 90-243, S. 5; P.A. 00-99, S. 83, 154; P.A. 09-74, S. 9; P.A. 11-51, S. 134.)
History: 1967 act made previous provisions Subsec. (a), replacing former alphabetic Subdiv. indicators with numeric indicators and rephrasing provision re failure to observe commissioner's orders to make good deficiencies, etc., and added Subsecs. (b) to (f); 1971 act amended Subsec. (c) to require institution of proceeding within 15 days after seizure rather than “immediately” and “returnable not less than twelve or more than thirty days after the service thereof” rather than “in no case more than thirty days after such seizure, or the next return day but one, whichever shall be sooner”; P.A. 77-614 replaced commissioner of state police with commissioner of public safety in Subsec. (c), effective January 1, 1979; P.A. 78-280 substituted “judicial district” for “county” in Subsec. (a); P.A. 90-243 deleted Subsecs. (d) to (f), inclusive, re the surplus and deficiency of a company in receivership; Sec. 38-9 transferred to Sec. 38a-18 in 1991; P.A. 00-99 deleted reference to sheriff of the county and deputy sheriffs in Subsec. (c), effective December 1, 2000; P.A. 09-74 made technical changes in Subsec. (a), effective May 27, 2009; pursuant to P.A. 11-51, “Commissioner of Public Safety” was changed editorially by the Revisors to “Commissioner of Emergency Services and Public Protection” in Subsec. (c), effective July 1, 2011.
Annotations to former section 38-9:
It is no defense to an application by commissioner for a receiver that another company has assumed all the liabilities. 45 C. 381. Statute vests commissioner with a wide range of discretion, with the exercise of which the courts will not interfere. 60 C. 460. Exclusive right of commissioner to apply for receiver where company is acting illegally. 80 C. 684. Cited. 128 C. 363.
Annotation to present section:
Cited. 219 C. 384.
