Section 21.78.250. Fraudulent transfers before petition.

   (a) A transfer made, or an obligation incurred, by an insurer within one year before the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay, or defraud either existing or future creditors.  A transfer made, or an obligation incurred, by an insurer ordered to be rehabilitated or liquidated under this chapter that is fraudulent under this section, may be avoided by the receiver, unless the transfer or obligation was to a person who in good faith is a purchaser, lienor, or obligee for a present fair equivalent value. A purchaser, lienor, or obligee, who in good faith has given a consideration less than fair for the transfer, lien, or obligation may retain the property, lien, or obligation as security for repayment. The court may, on due notice, order a transfer or obligation to be preserved for the benefit of the estate, and in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor, or obligee.
   (b) A transfer
        (1) of property other than real property is considered to be made when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee under AS 21.78.252;
        (2) of real property is considered to be made when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee;
        (3) that creates an equitable lien is not considered to be perfected if there are available means by which a legal lien could be created;
        (4) not perfected before the filing of a petition for liquidation is considered to be made immediately before the filing of the successful petition.
   (c) The provisions of (b) of this section apply whether or not there is or was a creditor who might have obtained a lien or a person who might have become a bona fide purchaser.
   (d) A transaction of the insurer with a reinsurer is considered fraudulent and may be avoided by the receiver under (a) of this section if
        (1) the transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from a part of its duty to pay the originally specified share of losses that occurred before the time of the transaction, unless the reinsurer gives a present fair equivalent value for the release; and
        (2) a part of the transaction took place within one year before the date of filing of the petition through which the receivership was commenced.

Notes

History

(Sec. 1 ch 120 SLA 1966; am Sec. 72 ch 50 SLA 1990)