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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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