Connecticut General Statutes 38a-409 – Use of reserve on liquidation, dissolution or insolvency
(a) If a domestic title insurer becomes insolvent, is in the process of liquidation or dissolution or is in the possession of the commissioner:
Terms Used In Connecticut General Statutes 38a-409
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commissioner: means the Insurance Commissioner. See Connecticut General Statutes 38a-1
- insolvent: means , for any insurer, that it is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities plus the greater of: (A) Capital and surplus required by law for its organization and continued operation. See Connecticut General Statutes 38a-1
- Insurance: means any agreement to pay a sum of money, provide services or any other thing of value on the happening of a particular event or contingency or to provide indemnity for loss in respect to a specified subject by specified perils in return for a consideration. See Connecticut General Statutes 38a-1
- insurance company: includes any person or combination of persons doing any kind or form of insurance business other than a fraternal benefit society, and shall include a receiver of any insurer when the context reasonably permits. See Connecticut General Statutes 38a-1
(1) Such amount of the assets of such title insurance company equal to the reserve then remaining may be used by or with the written approval of the commissioner to pay for reinsurance of the liability of such title insurer upon all outstanding title insurance policies or reinsurance agreements to the extent for which claims for losses by the holders thereof are not then pending. The balance of such assets, if any, equal to the reserve may then be transferred to the general assets of the title insurer.
(2) The assets net of the reserve shall be available to pay claims for losses sustained by holders of title insurance policies then pending or arising up to the time reinsurance is effected. If claims for losses exceed such other assets of the title insurer such claims, when established, shall be paid pro rata out of the surplus assets attributable to the reserve, to the extent of such surplus, if any.
(b) If reinsurance is not obtained, assets equal to the reserve and assets constituting minimum capital, or so much as remains thereof after outstanding claims have been paid, shall constitute a trust fund to be held and invested by the commissioner for twenty years, out of which claims of policyholders shall be paid as they arise. The balance, if any, of the trust fund shall, at the expiration of twenty years, revert to the general assets of the title insurer.