Section 21.79.110. Miscellaneous provisions.

   (a) This chapter does not reduce the liability for unpaid assessments of an insured of an impaired or insolvent insurer operating under an insurance policy with assessment liability.
   (b) The association shall keep records of meetings relating to its activities. Records of meetings may only be made public under AS 21.79.040(b)
        (1) after the termination of a liquidation, rehabilitation, or conservation proceeding that involves the impaired or insolvent insurer;
        (2) after the insurer is no longer impaired or insolvent; or
        (3) upon the order of a court of competent jurisdiction.
   (c) The association is considered to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies that are reduced by an amount to which the association is entitled under AS 21.79.060(s). Assets of the impaired or insolvent insurer that are attributable to covered policies shall be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this chapter. Assets attributable to covered policies include those assets that should have been established as reserves for the covered policies. These assets are determined by multiplying the total assets of the impaired or insolvent insurer by a fraction, the numerator of which is the amount that should have been established as reserves for the covered policies of the impaired or insolvent insurer, and the denominator of which is the amount that should have been established as reserves for all policies of insurance issued in all states by that insurer. As a creditor of the impaired or insolvent insurer, the association and other similar entities in other states are entitled to receive a disbursement of assets out of the marshaled assets as a credit against contractual obligations under this chapter from time to time as the assets become available. If the liquidator has not, within 120 days of the date of a final determination of insolvency of an insurer by the court, made an application to the court for the approval of a proposal to disburse assets, the association may make application to the court for the approval of the association's proposal to disburse assets.
   (d) Before the termination of a liquidation, rehabilitation, or conservation proceeding, the court may consider the contributions of the respective parties, including the association, the shareholders and policyholders of the impaired or insolvent insurer, and any other party with a bona fide interest, in distributing the ownership rights of the impaired or insolvent insurer.  The court shall consider the welfare of policyholders of the continuing or successor insurers.  A distribution to stockholders of an impaired or insolvent insurer may not be made until the total amount of valid claims of the association for money spent in carrying out its powers and duties under AS 21.79.060, with respect to the insurer, has been fully recovered by the association.
   (e) The receiver appointed under an order for liquidation or rehabilitation of a domestic insurer may recover the amount distributed, other than stock dividends paid by the insurer on its capital stock, to a controlling affiliate, as defined in AS 21.22.200, during the five years preceding the petition for liquidation or rehabilitation.  However, if the insurer shows that, when paid, the distribution was lawful and reasonable, and that the distribution might adversely affect the ability of the insurer to fulfill the insurer's contractual obligations, the receiver may not recover the amount distributed to the controlling affiliate.  The following provisions apply to recovery of amounts distributed:
        (1) a controlling affiliate of the insurer at the time the distribution was paid is liable for a distribution received; a controlling affiliate at the time the distribution was declared is liable for a distribution that would have been received if the distribution had been paid at that time; if two or more persons are liable with respect to the same distribution, they are jointly and severally liable;
        (2) if an affiliate liable under (1) of this subsection is insolvent, all its controlling affiliates at the time the dividend was paid are jointly and severally liable for any amount that is not recovered from the insolvent affiliate;
        (3) the amount needed to pay the contractual obligations of the insolvent insurer that exceeds the available assets of the insolvent insurer is the greatest amount that may be recovered under this subsection.
   (f) A deposit in this state, held by law or required by the director for the benefit of creditors, including policy owners, not turned over to the domiciliary liquidator upon the entry of a final order of liquidation or order approving a rehabilitation plan of an insurer domiciled in this state or in a reciprocal state shall be promptly paid to the association. The association
        (1) is entitled to retain a portion of any amount paid to it equal to the percentage determined by dividing the aggregate amount of policy owners' claims related to that insolvency for which the association has provided statutory benefits by the aggregate amount of all policy owners' claims in this state related to that insolvency; and
        (2) shall remit to the domiciliary receiver the amount paid to the association and retained under (1) of this subsection; any amount paid to the association not retained by it under (1) of this subsection shall be treated as a distribution of state assets under AS 21.78.294 or a similar provision of the state of domicile of the impaired or insolvent insurer.
   (g) The association may not be required to give an appeal bond in an appeal of a civil action arising under this chapter.

Authorities

21.79.040;21.79.120

Notes

References

AS 21.79.040 Association established.
AS 21.79.120 Examination of the association, annual report.

History

(Sec. 3 ch 52 SLA 1990; am Sec. 36 - 38 ch 119 SLA 2000)