The receivership court may issue an order, process, or judgment including stays, injunctions, or other orders necessary or appropriate to carry out:
Terms Used In Utah Code 31A-27a-108
Affected guaranty association: means a guaranty association that is or may become liable for payment of a covered claim. See Utah Code 31A-27a-102
Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
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.
a similar mechanism in another state that is created for the payment of claims or continuation of policy obligations of a financially impaired or insolvent insurer. See Utah Code 31A-27a-102
Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
Insurance: includes :
(i)
a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
(ii)
a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
(iii)
a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy and includes:
is doing, has done, purports to do, or is licensed to do the business of insurance;
(b)
is or has been subject to the authority of, or to rehabilitation, liquidation, reorganization, supervision, or conservation by an insurance commissioner; or
Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
License: includes a certificate of authority issued to an insurer. See Utah Code 31A-1-301
Lien: A claim against real or personal property in satisfaction of a debt.
Netting agreement: includes :
(i)
a term or condition incorporated by reference in the contract or agreement described in Subsection (25)(a); or
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
qualified financial contract: means any of the following:
(a)
a commodity contract;
(b)
a forward contract;
(c)
a repurchase agreement;
(d)
a securities contract;
(e)
a swap agreement; or
(f)
a similar agreement that the commissioner determines by rule or order to be a qualified financial contract for purposes of this chapter. See Utah Code 31A-27a-102
receiver: means the commissioner or the commissioner's designee, including a rehabilitator, liquidator, or ancillary receiver. See Utah Code 31A-27a-102
receivership: means a rehabilitation, liquidation, or ancillary receivership. See Utah Code 31A-27a-102
receivership court: refers to the court in which a delinquency proceeding is pending. See Utah Code 31A-27a-102
Reinsurance: means a transaction or contract under which an assuming insurer agrees to indemnify a ceding insurer against all, or a part, of a loss that the ceding insurer may sustain under the one or more policies that the ceding insurer issues or will issue. See Utah Code 31A-27a-102
Reinsurer: means a person licensed in this state as an insurer with the authority to assume reinsurance. See Utah Code 31A-1-301
Security: means a:
(i)
note;
(ii)
stock;
(iii)
bond;
(iv)
debenture;
(v)
evidence of indebtedness;
(vi)
certificate of interest or participation in a profit-sharing agreement;
(vii)
collateral-trust certificate;
(viii)
preorganization certificate or subscription;
(ix)
transferable share;
(x)
investment contract;
(xi)
voting trust certificate;
(xii)
certificate of deposit for a security;
(xiii)
certificate of interest of participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease;
(xiv)
commodity contract or commodity option;
(xv)
certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in Subsections (171)(a)(i) through (xiv); or
(xvi)
another interest or instrument commonly known as a security. See Utah Code 31A-1-301
State: means a state, district, or territory of the United States. See Utah Code 31A-27a-102
Statute: A law passed by a legislature.
Statute of limitations: A law that sets the time within which parties must take action to enforce their rights.
(a)
this chapter; or
(b)
an approved rehabilitation plan.
(2)
This chapter may not be construed to limit the ability of the receiver to apply to a court other than the receivership court in any jurisdiction:
(a)
to carry out this chapter; or
(b)
for the purpose of pursuing claims against any person.
(3)
Except as provided in Subsections (5) and (6) or as otherwise provided in this chapter, the commencement of a delinquency proceeding under this chapter operates as a stay, applicable to all persons, of:
(a)
the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, an arbitration proceeding, or other action or proceeding against the insurer:
(i)
that was or could have been commenced before the commencement of the delinquency proceeding under this chapter; or
(ii)
to recover a claim against the insurer that arises before the commencement of the delinquency proceeding under this chapter;
(b)
the enforcement against the insurer or against property of the insurer of a judgment obtained before the commencement of the delinquency proceeding under this chapter;
(c)
an act to:
(i)
obtain or retain possession of:
(A)
property of the insurer; or
(B)
property from the insurer; or
(ii)
exercise control over property or records of the insurer;
(d)
an act to create, perfect, or enforce a lien against property of the insurer;
(e)
an act to collect, assess, or recover a claim against the insurer that arises before the commencement of a delinquency proceeding under this chapter;
(f)
the commencement or continuation of an action or proceeding against a reinsurer of the insurer:
(i)
by the holder of a claim against the insurer; and
(ii)
seeking a reinsurance recovery that is contractually due to the insurer;
(g)
the commencement or continuation of an action or proceeding by a governmental unit to terminate or revoke an insurancelicense; and
(h)
(i)
an action described in Subsection (3)(h)(ii):
(A)
with respect to a contract, agreement, or lease including:
(I)
a policy;
(II)
an insurance or reinsurance contract;
(III)
a surety bond; or
(IV)
a surety undertaking;
(B)
whether or not the insurer is a party to the contract, agreement, lease, policy, bond, or undertaking; and
(C)
if the sole basis for the action is:
(I)
that the insurer is the subject of a delinquency proceeding;
(II)
that one or more of the insurer’s licenses have been suspended or revoked because the insurer is the subject of a delinquency proceeding; or
(III)
both Subsections (3)(h)(i)(C)(I) and (II); and
(ii)
as to a contract, agreement, lease, policy, bond, or undertaking described in Subsection (3)(h)(i), an action for:
(A)
termination;
(B)
failure to renew;
(C)
suspension of performance;
(D)
declaration of default;
(E)
demand for additional, substitute, or replacement security or performance; or
(F)
other adverse action.
(4)
(a)
Except as provided in Subsections (5) and (6) or as otherwise provided in this chapter, the commencement of a delinquency proceeding under this chapter operates as a stay, applicable to all persons, of the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding, including the enforcement of any judgment:
(i)
against an insured that is or could have been commenced before the commencement of the delinquency proceeding under this chapter; or
(ii)
(A)
to recover a claim against the insured that arises before or after the commencement of the delinquency proceeding under this chapter; and
(B)
for which the insurer:
(I)
is or may be liable under a policy of insurance; or
(II)
is obligated to defend a party.
(b)
Subject to Subsection (4)(c), the stay provided by this Subsection (4) terminates 90 days after the day on which the receiver is appointed unless extended by order of the receivership court:
(i)
for good cause shown; and
(ii)
after notice to any affected parties and any hearing the receivership court determines is appropriate.
(c)
Notwithstanding the other provisions of this Subsection (4), any applicable statute of limitations with respect to any claim against an insured is tolled during the period of the stay provided by this Subsection (4) and any extensions.
(5)
Notwithstanding Subsection (3), the commencement of a delinquency proceeding under this chapter does not operate as a stay or prohibition of:
(a)
except as provided in Subsection (3)(g), a regulatory action by a commissioner of a nondomiciliary state, including the suspension of a license;
(b)
a criminal action;
(c)
an act to perfect, or to maintain or continue the perfection of, an interest in property to the extent that the act is accomplished within any relation back period under applicable law;
pursuit and enforcement of a nonmonetary governmental claim, judgment, or proceeding;
(f)
(i)
presentment of a negotiable instrument; and
(ii)
the giving of notice of and protesting dishonor of the negotiable instrument;
(g)
enforcement of a right against a single beneficiary trust established pursuant to and in compliance with Section 31A-17-404;
(h)
under or in connection with a netting agreement or qualified financial contract as provided for in Section 31A-27a-611, a right to cause:
(i)
the netting, liquidation, set off, termination, acceleration, or close out of an obligation; or
(ii)
enforcement of a:
(A)
security agreement;
(B)
security arrangement; or
(C)
other credit enhancement or guarantee or reimbursement obligation;
(i)
discharge by an affected guaranty association of statutory responsibilities under any statute applicable to the affected guaranty association; or
(j)
any of the following actions:
(i)
an audit by a governmental unit to determine tax liability;
(ii)
the issuance to the insurer by a governmental unit of a notice of tax deficiency;
(iii)
a demand for a tax return; or
(iv)
the making of an assessment for any tax and issuance of a notice and demand for payment of the assessment.
(6)
Except as provided in Subsection (7):
(a)
the stay of an act against property of the insurer under Subsection (3) continues until the property is no longer property of the receivership; and
(b)
the stay of any other act under Subsection (3) continues until the earlier of the day on which the delinquency proceeding is closed or the day on which the delinquency proceeding is dismissed.
(7)
(a)
The receivership court may grant relief from a stay of Subsection (3) or (4), by terminating, annulling, modifying, or conditioning the stay:
(i)
on request of a party in interest;
(ii)
after notice and any hearing the receivership court determines appropriate; and
(iii)
(A)
for cause; or
(B)
with respect to a stay of an act against property under Subsection (3) if:
(I)
the insurer does not have any equity in the property; and
(II)
the property is not necessary to an effective plan.
(b)
For the purposes of this Subsection (7), “cause” includes if:
(i)
the receiver cancels a policy, a surety bond, or a surety undertaking;
(ii)
the creditor is entitled, by contract or law, to require the insured or the principal to have a policy, a surety bond, or a surety undertaking; and
(iii)
the insured or the principal fails to obtain a replacement policy, surety bond, or surety undertaking within 30 days from the date of cancellation.
(8)
In a hearing under Subsection (7), the party seeking relief from the stay has the burden of proof on each issue, which shall be established by clear and convincing evidence.
(9)
(a)
The estate of an insurer that is injured by a willful violation of a stay provided by this section is entitled to actual damages, including costs and attorney fees.
(b)
In appropriate circumstances, the receivership court may impose sanctions in addition to those under Subsection (9)(a).
(10)
Notwithstanding any other provision of law, in relation to any stay or injunction under this section, a bond may not be required of:
