§2036. Provisions for conservation of assets of domestic company

A. Upon the filing by the commissioner of insurance of a verified petition alleging that with respect to a domestic company, a condition exists that would justify a court order for proceedings under this Chapter, and that the interests of creditors, policyholders, or the public will probably be endangered by delay, then the Nineteenth Judicial District Court for the Parish of East Baton Rouge or the court of the parish in which such company has or last had its principal office, shall issue forthwith without a hearing its order directing the commissioner of insurance to take possession and control of the property, business, books, records, and accounts of the company and of the premises occupied by it for the transaction of its business, or such part of each as the petition shall specify, and enjoining the company and its officers, directors, agents, servants, and employees from disposition of its property and from transaction of its business except with the concurrence of the commissioner of insurance until the further order of the court.

B. The order shall continue in force and effect for such time as the court deems necessary for the commissioner of insurance to ascertain the condition and situation of the company. On motion of either party or on its own motion, the court may from time to time hold such hearings as it deems desirable, and may extend, shorten or modify the terms of the seizure order. So far as the court deems it possible, the parties shall be given adequate notice of such hearings. As soon as practicable, the court shall vacate the seizure order, either when the commissioner of insurance has failed to institute proceedings under R.S. 22:2006 having a reasonable opportunity to do so, or upon an order of the court pursuant to such proceedings.

C. Entry of a seizure order under this Section shall not constitute an anticipatory breach of any contract of the company.

D. The court may hold all hearings in conservation proceedings privately in chambers, and shall do so on request of any officer of the company proceeded against.

E. In conservation proceedings and judicial reviews thereof, all records of the company, other documents, and all insurance department files and court records and papers, so far as they pertain to and are a part of the record of the conservation proceedings, shall be and remain confidential except as is necessary to obtain compliance therewith, unless and until the court, after hearing arguments in chambers from the commissioner of insurance and the company, shall decide otherwise, or unless the company requests that the matter be made public.

F. Any person having possession of and willfully refusing to deliver any of the property, business, books, records or accounts of a company against which a seizure order has been issued shall be punishable by a fine of not more than five hundred dollars or imprisonment for not more than six months, or both.

G. No individual shall be selected or designated by the commissioner of insurance or the court as a conservator of a domestic insurer in conservation if the individual audited or investigated the insurer prior to its conservation.

Added by Acts 1970, No. 82, §1; Acts 1991, No. 742, §1; Acts 1992, No. 808, §1, eff. July 7, 1992; Acts 1993, No. 955, §1; Redesignated from R.S. 22:756.1 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2012, No. 271, §1; Acts 2012, No. 468, §1.