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304.33-160 Powers and duties of the rehabilitator.
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Special deputy. The commissioner as rehabilitator shall appoint one (1) or
more special deputies, who are active or retired senior executives from a
successful insurer, and who shall have all the powers and responsibilities of
the rehabilitator granted under this section, and the commissioner may employ
such counsel, clerks, and assistants as deemed necessary. The compensation
of the special deputy, counsel, clerks, and assistants and all expenses of
taking possession of the insurer and of conducting the proceedings shall be
fixed by the commissioner, with the approval of the court and shall be paid out
of the funds or assets of the insurer. The persons appointed under this section
shall serve at the pleasure of the commissioner. If the property of the insurer
does not contain sufficient cash or liquid assets to defray the costs incurred,
the commissioner may advance the costs so incurred out of any appropriation
for the maintenance of the Department of Insurance. Any amounts so
advanced for expenses of administration shall be repaid to the commissioner
for the use of the Department of Insurance out of the first available money of
the insurer.
General power. The rehabilitator may take action as he or she deems
necessary or appropriate to reform and revitalize the insurer. He or she shall
have all the powers of the directors, officers, and managers, whose authority
shall be suspended, except as they are redelegated by the rehabilitator. He or
she shall have full power to direct and manage, to hire and discharge
employees subject to any contract rights they may have, and to deal with the
property and business of the insurer.
Advice from experts. The rehabilitator may consult with and obtain formal or
informal advice and aid of insurance experts.
Pursuit of insurer's claims against insiders. If the rehabilitator finds that there
has been criminal or tortious conduct or breach of any contractual or fiduciary
obligation detrimental to the insurer by any officer, manager, agent, employee,
or other person, he or she may pursue all appropriate legal remedies on behalf
of the insurer.
Reorganization plan. The rehabilitator may prepare a plan for the
reorganization, consolidation, conversion, reinsurance, merger, or other
transformation of the insurer. Upon application of the rehabilitator for approval
of the plan, and after the notice and hearing as the court prescribes, the court
may either approve or disapprove the plan proposed, or may modify it and
approve it as modified. If it is approved, the rehabilitator shall carry out the
plan. In the case of a life insurer, the plan proposed may include the imposition
of liens upon the equities of policyholders of the insurer, if all rights of
shareholders are first extinguished. A plan for a life insurer may also propose
imposition of a moratorium upon loan and cash surrender rights upon policies,
for such period and to such an extent as are necessary.
Fraudulent transfers. The rehabilitator shall have the power to avoid fraudulent
transfers under KRS 304.33-290 and 304.33-300.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1441, effective July 15, 2010. -Amended 1994 Ky. Acts ch. 496, sec. 15, effective July 15, 1994. -- Amended
1990 Ky. Acts ch. 422, sec. 11, effective July 13, 1990. -- Created 1970 Ky. Acts
ch. 301, subtit. 33, sec. 16, effective June 18, 1970.
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