Section 431:15-201 - Commissioner's summary orders and supervision proceedings(a) If, upon examination or at any other time, the commissioner finds that any domestic insurer requires supervision because it is in a condition that would render the continuance of its business hazardous to the public or to holders of its policies or certificates of insurance, or if the domestic insurer gives its consent, then the commissioner shall issue a supervision order and shall: (1) Notify the insurer of the commissioner's order; and(2) Furnish to the insurer a written list of the commissioner's requirements to abate the commissioner's order. The commissioner shall also proceed, if necessary, against the insurer pursuant to section 431:2-203.(b) During the period of supervision, the commissioner may appoint a supervisor to supervise the insurer and may employ counsel, clerks, and assistants as necessary. The supervisor shall have all the powers and responsibilities granted under this section. Any person appointed under this section shall serve at the pleasure of the commissioner.(c) The compensation of the supervisor, counsel, clerks, and assistants and all expenses of the supervision shall be approved by the commissioner and paid out of the funds or assets of the insurer upon presentation of a detailed account of the expenses filed by the supervisor or other persons employed or appointed by the commissioner. The commissioner may in whole or in part defer payment of expenses due from the insurer pursuant to this section upon a showing that payment would adversely impact the financial condition of the insurer and jeopardize its recovery during supervision. Deferred payments shall be made by the insurer when payment no longer adversely impacts its financial condition.(d) The order appointing a supervisor shall direct the supervisor to enforce orders issued under subsection (a) and may prohibit the insurer from doing any of the following during the period of supervision without prior written approval of the commissioner or supervisor: (1) Dispose of, convey, or encumber any of its assets or business in force;(2) Withdraw from any of its bank accounts;(3) Lend any of its funds;(4) Invest any of its funds;(5) Transfer any of its property;(6) Incur any debt, obligation, or liability;(7) Merge or consolidate with another company;(8) Enter into any new reinsurance contract or treaty; or(9) Write any new or renewal business.(e) Any insurer subject to an order under this section shall comply with the requirements of the commissioner within sixty days from the date the supervision order is served. If the insurer fails to comply within the time specified, the commissioner may institute proceedings under section 431:15-301 or section 431:15-306 to have a rehabilitator or liquidator appointed or seek to enforce the order pursuant to section 431:2-203.(f) Any insurer subject to an order under this section may request a hearing to review the order. The hearing shall be held as provided in chapter 91, but the request for a hearing shall not stay the effect of the order. The insurer, at any time, may waive said hearing and apply for immediate judicial relief by means of any remedy afforded by law without first exhausting administrative remedies.(g) During the period of supervision, the insurer may request that the commissioner review an action taken or proposed to be taken by the supervisor that the insurer believes is not in the best interest of the insurer.(h) If any person has violated any supervision order issued under this section, the person shall pay a penalty imposed by the circuit court of the first judicial circuit of this State, which shall not exceed $10,000 for each violation.(i) The commissioner may apply for, and the court may grant, restraining orders, preliminary or permanent injunctions, or other orders to enforce a supervision order.(j) If any person: (1) With authority over or in charge of any segment of the insurer's affairs; or(2) Who exercises control directly or indirectly over activities of the insurer through any holding company or other affiliate of the insurer; knowingly violates any valid order of the commissioner issued under this section and, as a result of the violation, the net worth of the insurer is reduced or the insurer suffers loss it would not otherwise have suffered, the person shall become personally liable to the insurer for the amount of the reduction or loss. The commissioner or supervisor may bring an action on behalf of the insurer in the circuit court of the first judicial circuit of this State to recover the amount of the reduction or loss together with any costs.
Amended by L 2017, c 152,§ 10, eff. 7/1/2017.