§431:11-113  Recovery.  (a)  If an orderfor liquidation or rehabilitation of a domestic insurer has been entered, thereceiver appointed under the order shall have a right to recover on behalf ofthe insurer:

(1)  From any parent corporation or holding company orperson or affiliate who otherwise controlled the insurer, the amount ofdistributions (other than distributions of shares of the same class of stock)paid by the insurer on its capital stock, or

(2)  Any payment in the form of a bonus, terminationsettlement, or extraordinary lump sum salary adjustment made by the insurer orits subsidiary(ies) to a director, officer, or employee.

Where the distribution or payment pursuant toitems (1) or (2) is made at any time during the one year preceding the petitionfor liquidation, conservation or rehabilitation, as the case may be, subject tothe limitations of subsections (b), (c), and (d).

(b)  No distribution shall be recoverable ifthe parent or affiliate shows that when paid the distribution was lawful andreasonable, and that the insurer did not know and could not reasonably haveknown that the distribution might adversely affect the ability of the insurerto fulfill its contractual obligations.

(c)  Any person who was a parent corporation orholding company or a person who otherwise controlled the insurer or affiliateat the time the distributions were paid shall be liable up to the amount ofdistributions or payments under subsection (a) the person received.  Any personwho otherwise controlled the insurer at the time the distributions weredeclared shall be liable up to the amount of distributions the person wouldhave received if they had been paid immediately.  If two or more persons areliable with respect to the same distributions, they shall be jointly andseverally liable.

(d)  The maximum amount recoverable under thissection shall be the amount needed in excess of all other available assets ofthe impaired or insolvent insurer to pay the contractual obligations of theimpaired or insolvent insurer and to reimburse any guaranty funds.

(e)  To the extent that any person liable undersubsection (c) is insolvent or otherwise fails to pay claims due from itpursuant to subsection (c), its parent corporation or holding company or personwho otherwise controlled it at the time the distribution was paid, shall bejointly and severally liable for any resulting deficiency in the amountrecovered from the parent corporation or holding company or person whootherwise controlled it. [L 1987, c 349, pt of §8]