§ 31A-27a-303. Filing of rehabilitation plans.

(1)

(a) The rehabilitator shall prepare and file a plan to effect rehabilitation with the receivership court within:

(i) one year after the day on which the rehabilitation order is entered; or

(ii) such further time as the receivership court may allow.

(b) The receivership court may take an action described in Subsection (1)(c):

(i) upon application of the rehabilitator for approval of a plan; and

(ii) after the notice and hearings the receivership court may prescribe.

(c) If the conditions of Subsection (1)(b) are met, the receivership court may:

(i) approve the plan proposed;

(ii) disapprove the plan proposed; or

(iii)

(A) modify the plan proposed; and

(B) approve the plan as modified.

(d) If the plan is approved, the rehabilitator shall carry out the plan.

(e) In the case of a life insurer, the plan proposed may:

(i) include the imposition of a lien upon a policy of the insurer, if all rights of shareholders are relinquished; and

(ii) propose imposition of a moratorium upon loan and cash surrender rights under a policy for a period not to exceed one year from the day on which the order approving the rehabilitation plan is entered, unless the receivership court, for good cause shown, extends the moratorium.

(2) Once a plan is filed, any party in interest may object to the plan.

(3) A plan shall:

(a) except as provided in Subsection (5), provide no less favorable treatment of a claim or class of claims than would occur in liquidation, unless the holder of a particular claim or interest agrees to a less favorable treatment of that particular claim or interest;

(b) provide adequate means for the plan's implementation;

(c) contain information concerning the financial condition of the insurer and the operation and effect of the plan, as far as is reasonably practicable in light of:

(i) the nature and history of the insurer;

(ii) the condition of the insurer's records; and

(iii) the nature of the plan; and

(d) provide for the disposition of the records relevant to the duties and obligations covered by the plan.

(4) A plan may include any other provisions not inconsistent with this chapter, including:

(a) payment of distributions;

(b)

(i) assumption or reinsurance of all or a portion of the insurer's remaining liabilities by a licensed insurer or other entity; and

(ii) transfer of assets and related records to the licensed insurer or other entity;

(c) to the extent appropriate, application of insurance company regulatory market conduct standards to any entity administering claims on behalf of the receiver or assuming direct liabilities of the insurer;

(d) contracting with a guaranty association or any other qualified entity to perform the administration of claims;

(e) annual independent financial and performance audits of any entity administering claims on behalf of the receiver that is not otherwise subject to examination pursuant to state insurance law; and

(f) termination of the insurer's liabilities other than those under policies of insurance as of a date certain.

(5)

(a) A plan may designate and separately treat one or more separate subclasses consisting only of those claims within the subclasses that are for or reduced to de minimis amounts.

(b) For purposes of this Subsection (5), a "de minimis amount" is an amount equal to or less than a maximum de minimis amount approved by the receivership court as being reasonable and necessary for administrative convenience.

Enacted by Chapter 309, 2007 General Session