South Dakota Codified Laws 58-29B-42.1. Plan for continued performance of policy claim obligations during appeal of liquidation order
If an insurer is in liquidation, within five days of July 1, 1992, or, if later, 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 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 includes the ground of insolvency. If the company’s financial condition does not, in the judgment of the director, support the full performance of all policy claims obligations during the appeal 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 director finds to be fair and equitable considering the relative circumstances of the policyholders 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 may lie against the director or any of his deputies, agents, clerks, assistants, or attorneys by any party based on preference in a plan during the pendency of appeal approved by the court.
The plan may not supersede or affect the obligations of any insurance guaranty association.
Terms Used In South Dakota Codified Laws 58-29B-42.1
- 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.
- 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
If 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, the plans, during the appeal period, shall provide for equitable adjustments to be made by the liquidator to any distributions of assets to guaranty associations, so that all guaranty associations equally benefit on a pro rata basis from the assets of the estate. Further, if an order of liquidation is set aside upon any appeal, the company may not be released from delinquency proceedings until all funds advanced by any guaranty association, including reasonable administrative expenses 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.
Source: SL 1992, ch 351, § 5.