40-759.Deficiencies in operation by domestic society; notice tocorrect; show cause requirement upon failure to correct; injunction or quowarranto action by attorney general; recommencement of business;liquidation; receiver; procedures applicable to society voluntarilydiscontinuing business.(a) When the commissioner of insurance upon investigationfinds that a domestic society: (1) Has exceeded its powers, (2) has failedto comply with any provisions of this act, (3) is not fulfilling itscontracts in good faith, (4) has a membership of less than 400 after anexistence of one year or more, or (5) is conducting business fraudulently orin a manner hazardous to its members, creditors, the public or thebusiness, the commissioner shall notify the society of such deficiency ordeficiencies and state in writing the reasons for dissatisfaction. Thecommissioner shall at once issue a written notice to the society requiringthat the deficiency or deficiencies which exist are corrected. After suchnotice the society shall have a 30-day period in which to comply with thecommissioner's request for correction. If the society fails to comply,the commissioner shall notify the society of such findings of noncomplianceand require the society to show cause on a date named why it should not beenjoined from carrying on any business until the violation complained ofshall have been corrected or why an action in quo warranto should not becommenced against the society.
(b) If on such date the society does not present good and sufficientreasons why it should not be so enjoined or why such action should not becommenced, the commissioner of insurance may present the facts relatingthereto to the attorney general who shall, if deeming the circumstances towarrant, commence an action to enjoin the society from transacting businessor in quo warranto.
(c) The court shall thereupon notify the officers of the society of ahearing. If after a full hearing it appears that the society should be soenjoined or liquidated or a receiver appointed, the court shall enter thenecessary order. No society so enjoined shall have the authority to do business until:
(1) The commissioner of insurance finds that the violation complained ofhas been corrected;
(2) the costs of such action shall have been paid by the society if thecourt finds that the society was in default as charged;
(3) the court has dissolved its injunction; and
(4) the commissioner of insurance has reinstated the certificate of authority.
(d) If the court orders the society liquidated, it shall be enjoinedfrom carrying on any further business, whereupon the receiver of thesociety shall proceed at once to take possession of the books, papers,money and other assets of the society and, under the direction of thecourt, proceed forthwith to close the affairs of the society and todistribute its funds to those entitled thereto.
(e) No action under this section shall be recognized in any court ofthis state unless brought by the attorney general upon request of thecommissioner of insurance. Whenever a receiver is to be appointed for adomestic society, the court shall appoint the commissioner of insurance as such receiver.
(f) The provisions of this section relating to hearing by thecommissioner of insurance, action by the attorney general at the request ofthe commissioner of insurance, hearing by the court, injunction andreceivership shall be applicable to a society which shall voluntarilydetermine to discontinue business.
40-759.Deficiencies in operation by domestic society; notice tocorrect; show cause requirement upon failure to correct; injunction or quowarranto action by attorney general; recommencement of business;liquidation; receiver; procedures applicable to society voluntarilydiscontinuing business.(a) When the commissioner of insurance upon investigationfinds that a domestic society: (1) Has exceeded its powers, (2) has failedto comply with any provisions of this act, (3) is not fulfilling itscontracts in good faith, (4) has a membership of less than 400 after anexistence of one year or more, or (5) is conducting business fraudulently orin a manner hazardous to its members, creditors, the public or thebusiness, the commissioner shall notify the society of such deficiency ordeficiencies and state in writing the reasons for dissatisfaction. Thecommissioner shall at once issue a written notice to the society requiringthat the deficiency or deficiencies which exist are corrected. After suchnotice the society shall have a 30-day period in which to comply with thecommissioner's request for correction. If the society fails to comply,the commissioner shall notify the society of such findings of noncomplianceand require the society to show cause on a date named why it should not beenjoined from carrying on any business until the violation complained ofshall have been corrected or why an action in quo warranto should not becommenced against the society.
(b) If on such date the society does not present good and sufficientreasons why it should not be so enjoined or why such action should not becommenced, the commissioner of insurance may present the facts relatingthereto to the attorney general who shall, if deeming the circumstances towarrant, commence an action to enjoin the society from transacting businessor in quo warranto.
(c) The court shall thereupon notify the officers of the society of ahearing. If after a full hearing it appears that the society should be soenjoined or liquidated or a receiver appointed, the court shall enter thenecessary order. No society so enjoined shall have the authority to do business until:
(1) The commissioner of insurance finds that the violation complained ofhas been corrected;
(2) the costs of such action shall have been paid by the society if thecourt finds that the society was in default as charged;
(3) the court has dissolved its injunction; and
(4) the commissioner of insurance has reinstated the certificate of authority.
(d) If the court orders the society liquidated, it shall be enjoinedfrom carrying on any further business, whereupon the receiver of thesociety shall proceed at once to take possession of the books, papers,money and other assets of the society and, under the direction of thecourt, proceed forthwith to close the affairs of the society and todistribute its funds to those entitled thereto.
(e) No action under this section shall be recognized in any court ofthis state unless brought by the attorney general upon request of thecommissioner of insurance. Whenever a receiver is to be appointed for adomestic society, the court shall appoint the commissioner of insurance as such receiver.
(f) The provisions of this section relating to hearing by thecommissioner of insurance, action by the attorney general at the request ofthe commissioner of insurance, hearing by the court, injunction andreceivership shall be applicable to a society which shall voluntarilydetermine to discontinue business.
40-759.Deficiencies in operation by domestic society; notice tocorrect; show cause requirement upon failure to correct; injunction or quowarranto action by attorney general; recommencement of business;liquidation; receiver; procedures applicable to society voluntarilydiscontinuing business.(a) When the commissioner of insurance upon investigationfinds that a domestic society: (1) Has exceeded its powers, (2) has failedto comply with any provisions of this act, (3) is not fulfilling itscontracts in good faith, (4) has a membership of less than 400 after anexistence of one year or more, or (5) is conducting business fraudulently orin a manner hazardous to its members, creditors, the public or thebusiness, the commissioner shall notify the society of such deficiency ordeficiencies and state in writing the reasons for dissatisfaction. Thecommissioner shall at once issue a written notice to the society requiringthat the deficiency or deficiencies which exist are corrected. After suchnotice the society shall have a 30-day period in which to comply with thecommissioner's request for correction. If the society fails to comply,the commissioner shall notify the society of such findings of noncomplianceand require the society to show cause on a date named why it should not beenjoined from carrying on any business until the violation complained ofshall have been corrected or why an action in quo warranto should not becommenced against the society.
(b) If on such date the society does not present good and sufficientreasons why it should not be so enjoined or why such action should not becommenced, the commissioner of insurance may present the facts relatingthereto to the attorney general who shall, if deeming the circumstances towarrant, commence an action to enjoin the society from transacting businessor in quo warranto.
(c) The court shall thereupon notify the officers of the society of ahearing. If after a full hearing it appears that the society should be soenjoined or liquidated or a receiver appointed, the court shall enter thenecessary order. No society so enjoined shall have the authority to do business until:
(1) The commissioner of insurance finds that the violation complained ofhas been corrected;
(2) the costs of such action shall have been paid by the society if thecourt finds that the society was in default as charged;
(3) the court has dissolved its injunction; and
(4) the commissioner of insurance has reinstated the certificate of authority.
(d) If the court orders the society liquidated, it shall be enjoinedfrom carrying on any further business, whereupon the receiver of thesociety shall proceed at once to take possession of the books, papers,money and other assets of the society and, under the direction of thecourt, proceed forthwith to close the affairs of the society and todistribute its funds to those entitled thereto.
(e) No action under this section shall be recognized in any court ofthis state unless brought by the attorney general upon request of thecommissioner of insurance. Whenever a receiver is to be appointed for adomestic society, the court shall appoint the commissioner of insurance as such receiver.
(f) The provisions of this section relating to hearing by thecommissioner of insurance, action by the attorney general at the request ofthe commissioner of insurance, hearing by the court, injunction andreceivership shall be applicable to a society which shall voluntarilydetermine to discontinue business.
