2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 507C - INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION
507C.12 - GROUNDS FOR REHABILITATION.

        507C.12  GROUNDS FOR REHABILITATION.
         The commissioner may petition the district court for an order to
      rehabilitate a domestic insurer or an alien insurer domiciled in this
      state on any of the following grounds:
         1.  The insurer is in a condition that the further transaction of
      business would be financially hazardous 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 a person, whether an officer,
      manager, general agent, employee, or other person, who in fact has
      executive authority in the insurer, if the person has been found
      after notice and hearing by the commissioner to be dishonest or
      untrustworthy in a way affecting the insurer's business.
         4.  Control of the insurer is in a person or persons found after
      notice and hearing to be untrustworthy.  Control may be by stock
      ownership or by other means and may be direct or indirect.
         5.  A 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 commissioner concerning the insurer's affairs, 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 the person's influence on management.
         6.  After demand by the commissioner under chapter 507 or under
      this chapter, the insurer has failed to promptly make available for
      examination any of its property, books, accounts, documents, or other
      records, or those of a subsidiary or related company within the
      control of the insurer, or those of a person having executive
      authority in the insurer so far as they pertain to the insurer.
         7.  Without first obtaining the written consent of the
      commissioner, the insurer has transferred, or attempted to transfer,
      in a manner contrary to chapter 521 or 521A, substantially its entire
      property or business, or has entered into a 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 of
      its property other than as authorized under the insurance laws of
      this state, and the appointment has been made or is imminent, and the
      appointment might oust the court of this state of jurisdiction or
      might prejudice orderly delinquency proceedings under this chapter.
         9.  Within the previous three years the insurer has willfully
      violated its charter or articles of incorporation, its bylaws, an
      insurance law of this state, or a valid order of the commissioner
      under section 507C.9.
         10.  The insurer has failed to pay within sixty days after the due
      date an obligation to a state or any subdivision of a state or a
      judgment entered in a state, if the court in which the judgment was
      entered had jurisdiction over the subject matter.  However,
      nonpayment shall not be a ground until sixty days after a good faith
      effort by the insurer to contest the obligation has been terminated
      whether the effort is before the commissioner 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 within the time allowed and, after written
      demand by the commissioner, has failed to immediately give an
      adequate explanation.
         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 request or consent to rehabilitation
      under this chapter.
         If the petition alleges that extraordinary circumstances exist and
      that there is imminent substantial risk to the insurer's solvency if
      the insurer is not immediately placed into rehabilitation, the court
      may issue, ex parte and without a hearing, the requested order of
      rehabilitation.  An insurer subject to an ex parte order under this
      section may petition the court after the issuance of the order for a
      hearing and review of the order.  The court shall hold the hearing
      and review not more than fifteen days after the request.  A hearing
      under this section may be held privately in chambers.  Upon the
      request of the insurer, the hearing shall be held privately in
      chambers.  

         84 Acts, ch 1175, § 12; 91 Acts, ch 26, §35
         Referred to in § 507C.9, 507C.16, 507C.17, 507C.50, 507C.51