20-172. Possession by director of person transacting insurance prior to appointment of receiver; powers of director in possession; stay of possession order; application to title insurance

A. The director may, upon submission of a verified petition stating that an insurer is in such an unsafe or unsound condition that it is or will become unable to meet the anticipated demands of its policyholders and that the condition cannot be corrected by the procedures of sections 20-169, 20-170 or 20-171, obtain an order from the superior court allowing the director to immediately take possession and control of the insurer pending a hearing on the appointment of a receiver. The superior court shall immediately consider the director's petition and shall immediately issue without notice to the affected party such order unless the verified petition filed by the director is faulty. After the order is granted, the director shall immediately, through the attorney general, apply to the superior court for the appointment of a receiver for the insurer. If at any time the court finds that no ground for receivership exists, the receivership shall be dissolved and the director's possession terminated.

B. When the director has taken possession of an insurer and until either the appointment and qualification of the receiver or the adjudication that no ground for the receivership exists, the director shall be vested with the full and exclusive power of management and control. The director shall have the power to continue or to discontinue the business, to stop or to limit the payment of its obligations, to employ any necessary assistants, to execute any instrument in the name of the insurer and to commence, defend and conduct in its name any action or proceeding in which the insurer may be a party.

C. An order issued by the director pursuant to this section shall not be stayed except by order of the superior court and upon the giving of security by the applicant in such sum as will be adequate to protect the insurer's policyholders.

D. The provisions of this section shall apply to all types of insurers including title insurers, hospital service corporations, medical service corporations, dental service corporations, optometric service corporations, and health care service organizations.