2006 Utah Code - 31A-27-110 — Immunity and indemnification of the receiver.

     31A-27-110.   Immunity and indemnification of the receiver.
     (1) For the purposes of this section:
     (a) "Legal action subject to this section" means a suit or liability:
     (i) against the receiver either:
     (A) personally; or
     (B) in the receiver's official capacity; and
     (ii) alleging a claim for damage to or loss of property or personal injury or other civil liability caused by or resulting from any alleged act, error, or omission of the receiver arising out of or by reason of the receiver's duties or employment.
     (b) "Person retained to assist" means:
     (i) a present or former special deputy or assistant special deputy appointed by a receiver; and
     (ii) a person that the receiver, special deputy, or assistant special deputy employs or retains to assist in a delinquency proceeding under this chapter.
     (c) "Receiver" means a person responsible for the conduct of a delinquency proceeding under this chapter including:
     (i) a former or present receiver;
     (ii) a supervisor;
     (iii) a rehabilitator;
     (iv) a deputy rehabilitator;
     (v) a liquidator;
     (vi) a deputy liquidator; or
     (vii) a person retained to assist a person described in Subsection (1)(c)(i) through (vi) in the performance of that person's duties.
     (2) (a) Except as provided in Subsection (2)(b), a receiver has judicial immunity and is immune from a legal action subject to this section.
     (b) A receiver is not immune from suit or liability for any damage, loss, injury, or liability caused by the intentional or willful and wanton misconduct of the receiver.
     (3) (a) Except as provided in Subsection (3)(b), if a legal action subject to this section is commenced against the receiver, the receiver shall be indemnified from the assets of the insurer for any:
     (i) expense;
     (ii) attorneys' fees;
     (iii) judgment;
     (iv) settlement;
     (v) decree; or
     (vi) amount due and owing or paid in satisfaction of or incurred in the defense of the legal action.
     (b) Notwithstanding Subsection (3)(a), a receiver is not indemnified from the assets of the insurer if a court determines on a final adjudication on the merits that the alleged act, error, or omission of the receiver giving rise to the claim:
     (i) did not arise out of or by reason of the receiver's duties or employment; or
     (ii) was caused by the intentional or willful and wanton misconduct of the receiver.
     (4) (a) Attorneys' fees and any expenses incurred in defending a legal action for which immunity or indemnity is available under this section shall be paid from the assets of the insurer

as they are incurred in advance of the final disposition of the legal action once the receiver of the insurer's estate receives an undertaking by or on behalf of the receiver to repay the attorneys' fees and expenses if a court determines on a final adjudication on the merits that the receiver is not entitled to immunity or indemnity under this section.
     (b) Any indemnification paid or to be paid from the insurer's assets pursuant to this section shall be an administrative expense of the insurer.
     (c) (i) If there is actual or threatened legal action against a receiver for which immunity or indemnity may be available under this section, the receiver may take the actions described in Subsection (4)(c)(ii) as security for the payment of indemnity until such time as all:
     (A) applicable statutes of limitation have run;
     (B) actual or threatened actions against the receiver have been completely and finally resolved; and
     (C) obligations of the insurer and the receiver under this section shall have been satisfied.
     (ii) In accordance with Subsection (4)(c)(i), the receiver may at the receiver's discretion:
     (A) segregate and reserve from the assets of the insurer a reasonable amount of funds that in the judgment of the receiver is needed to provide immunity or indemnity; or
     (B) obtain a surety bond or make other arrangements that enable the receiver to fully secure the payment of all obligations under this section.
     (5) (a) Except as provided in Subsection (5)(b), if a legal action against a receiver for which indemnity may be available under this section is settled prior to final adjudication on the merits, the estate shall:
     (i) pay the settlement amount on behalf of the receiver; or
     (ii) indemnify the receiver for the settlement amount.
     (b) An estate is not required to pay the amounts under Subsection (5)(a) if the receiver determines that the claim:
     (i) did not arise out of or by reason of the receiver's duties or employment; or
     (ii) was caused by the intentional or willful and wanton misconduct of the receiver.
     (6) (a) In a legal action in which the receiver is a defendant, the portion of a settlement relating to the alleged act, error, or omission of the receiver is subject to the approval of the court before which the delinquency proceeding is pending.
     (b) The court shall not approve that portion of the settlement if it determines:
     (i) that the claim did not arise out of or by reason of the receiver's duties or employment; or
     (ii) that the claim was caused by the intentional or willful and wanton misconduct of the receiver.
     (7) (a) Subsection (2) applies to any suit based in whole or in part on any alleged act, error, or omission that takes place on or after May 3, 1999.
     (b) A legal action may not be filed or maintained against the receiver based in whole or in part on any alleged act, error, or omission which took place prior to May 3, 1999, unless on or before November 3, 1999:
     (i) suit is filed; and
     (ii) valid service of process is obtained.
     (c) Subsections (3) through (6) apply to any suit that is pending on or filed after May 3, 1999, without regard to when the alleged act, error, or omission took place.
     (8) This section:

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     (a) does not apply to an action brought by or on behalf of the receiver; and
     (b) may not be interpreted or applied to deprive the receiver of any immunity, indemnity, benefits of law, rights, or any defense otherwise available to the receiver.

Enacted by Chapter 131, 1999 General Session