2005 Idaho Code - 41-3312 — GROUNDS FOR REHABILITATION

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 33
                            INSURERS SUPERVISION,
                        REHABILITATION AND LIQUIDATION
    41-3312.  GROUNDS FOR REHABILITATION. The director may apply by petition
to the district court for an order authorizing him to rehabilitate a domestic
insurer or an alien insurer domiciled in this state on any one or more of the
following grounds:
    (1)  The insurer is in such condition that the further transaction of
business would be hazardous, financially, to its policyholders, creditors, or
the public.
    (2)  There is reasonable cause to believe that there has been embezzlement
from the insurer, wrongful sequestration or diversion of the insurer's assets,
forgery or fraud affecting the insurer, or other illegal conduct in, by, or
with respect to the insurer that if established would endanger assets in an
amount threatening the solvency of the insurer.
    (3)  The insurer has failed to remove any person who in fact has executive
authority in the insurer, whether an officer, manager, general agent,
employee, or other person, if the person has been found after notice and
hearing by the director to be dishonest or untrustworthy in a way affecting
the insurer's business.
    (4)  Control of the insurer, whether by stock ownership or otherwise, and
whether direct or indirect, is in a person or persons found after notice and
hearing to be untrustworthy.
    (5)  Any person who in fact has executive authority in the insurer,
whether an officer, manager, general agent, director or trustee, employee, or
other person, has refused to be examined under oath by the director concerning
its affairs, whether in this state or elsewhere, and after reasonable notice
of the fact the insurer has failed promptly and effectively to terminate the
employment and status of the person and all his influence on management.
    (6)  After demand by the director under the provisions of section 41-223,
Idaho Code, under this act, the insurer has failed to promptly make available
for examination any of its own property, books, accounts, documents, or other
records, or those of any subsidiary or related company within the control of
the insurer, or those of any person having executive authority in the insurer
so far as they pertain to the insurer.
    (7)  Without first obtaining the written consent of the director, the
insurer has transferred, or attempted to transfer, in a manner contrary to
chapter 38, title 41, Idaho Code, or sections 41-2856 and 41-2858, Idaho Code,
substantially its entire property or business, or has entered into any
transaction the effect of which is to merge, consolidate, or reinsure
substantially its entire property or business in or with the property or
business of any other person.
    (8)  The insurer or its property has been or is the subject of an
application for the appointment of a receiver, trustee, custodian, conservator
or sequestrator or similar fiduciary of the insurer or its property otherwise
than as authorized under the insurance laws of this state, and such
appointment has been made or is imminent, and such appointment might oust the
courts of this state of jurisdiction or might prejudice orderly delinquency
proceedings under this act.
    (9)  Within the previous six (6) years the insurer has willfully violated
its charter or articles of incorporation, its bylaws, any insurance law of
this state, or any valid order of the director under the provisions of section
41-3309, Idaho Code.
    (10)  The insurer has failed to pay within sixty (60) days after due date
any obligation to any state or any subdivision thereof or any judgment entered
in any state, if the court in which such judgment was entered had jurisdiction
over such subject matter except that such nonpayment shall not be a ground
until sixty (60) days after any good faith effort by the insurer to contest
the obligation has been terminated, whether it is before the director or in
the courts, or the insurer has systematically attempted to compromise or
renegotiate previously agreed settlements with its creditors on the ground
that it is financially unable to pay its obligations in full.
    (11)  The insurer has failed to file its annual report or other financial
report required by statute within the time allowed by law and, after written
demand by the director, has failed to give an adequate explanation
immediately.
    (12)  The board of directors or the holders of a majority of the shares
entitled to vote, or a majority of those individuals entitled to the control
of those entities specified in section 41-3801, Idaho Code, request or consent
to rehabilitation under this act.