(a) An order to liquidate the business of a domestic insurer shall appoint the commissioner and the commissioner’s successors in office as liquidator and shall direct the liquidator immediately 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 chancery court of Davidson County and the recorder 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 recorder 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 recorder of deeds would have imparted.
Terms Used In Tennessee Code 56-9-307
Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Deed: The legal instrument used to transfer title in real property from one person to another.
Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
Guaranty association: means the Tennessee insurance guaranty association created by chapter 12, part 1 of this title, the life and health insurance guaranty association created by chapter 12, part 2 of this title, and any other similar entity now or hereafter created by the general assembly of this state for the payment of claims of insolvent insurers. See Tennessee Code 56-9-103
Insurer: means any person who has done, purports to do, is doing or is licensed to do an insurance business, and is or has been subject to the authority of, or to liquidation, rehabilitation, reorganization, supervision, or conservation by, any insurance commissioner. See Tennessee Code 56-9-103
liabilities: include , but are not limited to, reserves required by statute or by department general regulations or specific requirements imposed by the commissioner upon a subject company at the time of admission or subsequent thereto. See Tennessee Code 56-9-103
Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
(b) Upon issuance of the order, the rights and liabilities of any such insurer and of its creditors, policyholders, shareholders, 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 §§ 56-9-308 and 56-9-326.(c) 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 in the order.(d) At the time of petitioning for an order of liquidation, or at any time thereafter, the commissioner, after making appropriate findings of an insurer’s insolvency, may petition the court for a judicial declaration of the insolvency. After providing notice and hearing as it deems proper, the court may make the declaration.(e) 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 (1) year of the liquidation order and at least annually thereafter.(f)(1) Within five (5) days after the initiation of an appeal of an order of liquidation, which order has not been stayed, the commissioner shall present for the court’s approval a plan for the continued performance of the defendant company’s policy claims obligations, including the duty to defend insureds under liability insurance policies, during the pendency of an appeal. The 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 defendant company’s financial condition will not, in the judgment of the commissioner, support the full performance of all policy claims obligations during the appeal pendency period, the plan may prefer the claims of certain policyholders and claimants over creditors and interested parties as well as other policyholders and claimants, as the commissioner finds to be fair and equitable, considering the relative circumstances of the policyholders and claimants. The court shall examine the plan submitted by the commissioner 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 commissioner or any of the commissioner’s deputies, agents, clerks, assistants or attorneys by any party based on preference in an appeal pendency plan approved by the court.(2) The appeal pendency plan shall not supersede or affect the obligations of any insurance guaranty association.(3)(A) Any such plans 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.(B) In the event an order of liquidation is set aside upon any appeal, the company shall not be released from delinquency proceedings unless and until all funds advanced by any guaranty association, including reasonable administrative expenses in connection therewith relating to obligations of the company, are repaid in full, together with interest at the judgment rate of interest or unless an arrangement for repayment has been made with the consent of all applicable guaranty associations.
