20-172. Possession by director of person
transacting insurance prior to appointment of receiver; powers of
director in possession; stay of possession order; application to
title insurance
A. The director may, upon submission of a verified petition stating that an insurer
is in such an unsafe or unsound condition that it is or will become unable to meet the
anticipated demands of its policyholders and that the condition cannot be corrected by
the procedures of sections 20-169, 20-170 or 20-171, obtain an order from the superior
court allowing the director to immediately take possession and control of the insurer
pending a hearing on the appointment of a receiver. The superior court shall immediately
consider the director's petition and shall immediately issue without notice to the
affected party such order unless the verified petition filed by the director is
faulty. After the order is granted, the director shall immediately, through the attorney
general, apply to the superior court for the appointment of a receiver for the
insurer. If at any time the court finds that no ground for receivership exists, the
receivership shall be dissolved and the director's possession terminated.
B. When the director has taken possession of an insurer and until either the
appointment and qualification of the receiver or the adjudication that no ground for the
receivership exists, the director shall be vested with the full and exclusive power of
management and control. The director shall have the power to continue or to discontinue
the business, to stop or to limit the payment of its obligations, to employ any necessary
assistants, to execute any instrument in the name of the insurer and to commence, defend
and conduct in its name any action or proceeding in which the insurer may be a party.
C. An order issued by the director pursuant to this section shall not be stayed
except by order of the superior court and upon the giving of security by the applicant in
such sum as will be adequate to protect the insurer's policyholders.
D. The provisions of this section shall apply to all types of insurers including
title insurers, hospital service corporations, medical service corporations, dental
service corporations, optometric service corporations, and health care service
organizations.
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