44-4818. Liquidation order; effect; appeal-pendency plan.

(1) An order to liquidate the business of a domestic insurer shall appoint the director and his or her successors in office liquidator and shall direct the liquidator forthwith to take possession of the assets of the insurer and to administer them under the general supervision of the court. The liquidator shall be vested by operation of law with the title to all of the property, contracts, and rights of action and all of the books and records of the insurer ordered liquidated, wherever located, as of the entry of the final order of liquidation. The filing or recording of the order with the clerk of the district court and the register of deeds of the county in which its principal office or place of business is located or, in the case of real estate, with the register of deeds of the county where the property is located shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that register of deeds would have imparted.

(2) Upon issuance of the order, the rights and liabilities of any such insurer and of its insureds, creditors, shareholders, and members and all other persons interested in its estate shall become fixed as of the date of entry of the order of liquidation except as provided in sections 44-4819 and 44-4837.

(3) An order to liquidate the business of an alien insurer domiciled in this state shall be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the business in the United States shall be the only assets and business included therein.

(4) At the time of petitioning for an order of liquidation or at any time thereafter, the director, after making appropriate findings of an insurer's insolvency, may petition the court for a judicial declaration of such insolvency. After providing such notice and hearing as it deems proper, the court may make the declaration.

(5) Any order issued under this section shall require financial reports to the court by the liquidator. Financial reports shall include at a minimum the assets and liabilities of the insurer and all funds received or disbursed by the liquidator during the current period. Financial reports shall be filed within one year of the liquidation order and at least annually thereafter.

(6)(a) Within five days after the initiation of an appeal of an order of liquidation, which order has not been stayed, the director shall present for the court's approval a plan for the continued performance of the insurer's policy claims obligations, including the duty to defend insureds under liability insurance policies, during the pendency of an appeal. For appeals pending on March 12, 1991, the plan shall be filed within five days after such date. Such plan shall provide for the continued performance and payment of policy claims obligations in the normal course of events, notwithstanding the grounds alleged in support of the order of liquidation including the ground of insolvency. In the event the insurer's financial condition will not, in the judgment of the director, support the full performance of all policy claims obligations during the appeal-pendency period, the plan may prefer the claims of certain insureds and claimants over creditors and interested parties as well as other insureds and claimants, as the director finds to be fair and equitable considering the relative circumstances of such insureds and claimants. The court shall examine the plan submitted by the director, and if it finds the plan to be in the best interests of the parties, the court shall approve the plan. No action shall lie against the director or any of his or her deputies, agents, clerks, assistants, or attorneys by any party based on preference in an appeal-pendency plan approved by the court.

(b) The appeal-pendency plan shall not supersede or affect the obligations of any guaranty association.

(c) An appeal-pendency plan shall provide for equitable adjustments to be made by the liquidator to any distributions of assets to guaranty associations in the event that the liquidator pays claims from assets of the estate which would otherwise be the obligations of any particular guaranty association but for the appeal of the order of liquidation, such that all guaranty associations equally benefit on a pro rata basis from the assets of the estate. In the event an order of liquidation is set aside upon any appeal, the insurer shall not be released from delinquency proceedings unless all funds advanced by any guaranty association, including reasonable administrative expenses in connection therewith relating to obligations of the insurer, are repaid in full, together with interest at the judgment rate of interest, or unless an arrangement for repayment thereof has been made with the consent of all applicable guaranty associations.

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