Colorado § 10-3-509 - Court's seizure order.

§ 10-3-509. Court's seizure order.

(1) The commissioner may file in the district court in and for the city and county of Denver a petition alleging, with respect to a domestic insurer:

(a) That there exists any fact or circumstance that would justify a court order for a formal delinquency proceeding against an insurer under this part 5;

(b) That the interests of policyholders, creditors, or the public will be endangered by delay; and

(c) That an order, the contents of which shall be furnished to the court by the commissioner, is necessary to protect the interests of policyholders, creditors, or the public.

(2) Upon a filing pursuant to subsection (1) of this section, the court may issue forthwith, ex parte, and without a hearing, the requested order which shall direct the commissioner to take possession and control of all or a part of the property, books, accounts, documents, and other records of an insurer, and of the premises occupied by the insurer for transaction of its business, and shall until further order of the court enjoin the insurer and its officers, managers, agents, and employees from disposition of its property and from the transaction of its business except with the written consent of the commissioner.

(3) The court shall specify in the order what its duration shall be, which shall be such time as the court deems necessary for the commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may from time to time hold such hearings as it deems desirable after such notice as it deems appropriate, and may extend, shorten, or modify the terms of the seizure order. The court shall vacate the seizure order if the commissioner fails to commence a formal proceeding under this part 5 after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this part 5 shall ipso facto vacate the seizure order. For purposes of this section, a "formal proceeding" means any liquidation or rehabilitation proceeding.

(4) Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the insurer.

(5) An insurer subject to an ex parte order under this section may petition the court at any time after the issuance of such order for a hearing and review of the order. The court shall hold such a hearing and review not more than fifteen days after the request. A hearing under this subsection (5) may be held privately in chambers and it shall be so held if the insurer proceeded against so requests. The court shall permit the directors of the insurer to take such actions as are reasonably necessary to defend against the order and may order payment from the estate of the insurer of such costs and other expenses of defense as justice may require.

(6) If, at any time after the issuance of such an order, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given to such person. An order that notice be given shall not stay the effect of any order previously issued by the court.

Source: L. 92: Entire part R&RE, p. 1436, § 14, effective July 1.