Missouri § 379.1418 - Grounds for liquidation — granting of relief, management of assets.

§ 379.1418. Grounds for liquidation — granting of relief, management of assets.

1.  The director may apply by petition to the circuit court for an order authorizing the director to conserve, rehabilitate or liquidate a SPLRC domiciled in this state on one or more of the following grounds:

(1)  There has been embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the SPLRC;

(2)  The SPLRC is insolvent and the holders of a majority in outstanding principal amount of each class of SPLRC securities or surplus notes request or consent to conservation, rehabilitation or liquidation under the provisions of this section.

2.  The court may not grant relief provided by subdivision (1) of subsection 1 of this section unless, after notice and a hearing, the director, who must have the burden of proof, establishes by clear and convincing evidence that relief must be granted.

3.  Notwithstanding another provision in sections 379.1353 to 379.1421, rules promulgated under sections 379.1353 to 379.1421, or another applicable provision of law or rule, upon any order of conservation, rehabilitation, or liquidation of a SPLRC, the receiver shall manage the assets and liabilities of the SPLRC under the provisions of sections 379.1353 to 379.1421.

4.  With respect to amounts recoverable under a SPLRC contract, the amount recoverable by the receiver must not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the ceding company, notwithstanding another provision in the SPLRC contract or other documentation governing the SPLRC's transactions.

5.  Notwithstanding the provisions of sections 379.1353 to 379.1421, an application or petition, or a temporary restraining order or injunction issued under the provisions of the insurance laws of a state, with respect to a ceding company, does not prohibit the transaction of a business by a SPLRC, including any payment by a SPLRC made under the SPLRC contract, the SPLRC's securities or surplus notes, or any action or proceeding against a SPLRC or its assets.

6.  Notwithstanding the provisions of any Missouri insurance law to the contrary, the commencement of a summary proceeding or other interim proceeding commenced before a formal delinquency proceeding with respect to a SPLRC, and any order issued by the court does not prohibit the payment by a SPLRC made under securities issued by an SPLRC or an SPLRC contract or the SPLRC from taking any action required to make the payment.

7.  Notwithstanding the provisions of the Missouri insurance laws:

(1)  A receiver of a ceding company shall not void a nonfraudulent transfer by a ceding company of money or other property paid or paid pursuant to a SPLRC contract; and

(2)  A receiver of a SPLRC shall not void a nonfraudulent transfer by the SPLRC of money or other property made to a ceding company pursuant to a SPLRC contract or made to or for the benefit of any holder of a SPLRC security on account of the SPLRC security.

8.  With the exception of the fulfillment of the obligations under a SPLRC contract, and notwithstanding another provision of sections 379.1353 to 379.1421 or other laws of this state, the assets of a SPLRC, including assets held in trust, letters of credit, financial guarantee policies or surety bonds, shall not be consolidated with or included in the estate of a ceding company in any delinquency proceeding against the ceding company under the provisions of sections 379.1353 to 379.1421 for any purpose including, without limitation, distribution to creditors of the ceding company.

9.  Other than as set forth in this section, delinquency proceedings of a SPLRC shall be conducted under sections 375.1150 to 375.1246.

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(L. 2007 S.B. 215)

---- end of effective  28 Aug 2007 ----

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