State Codes and Statutes

Statutes > North-carolina > Chapter_58 > GS_58-13-25

§ 58‑13‑25. Prohibition of hypothecation.

(a)        Every insurersubject to this Article shall at all times have and maintain free andunencumbered reserve assets equal to an amount that is the total of itspolicyholder‑related liabilities and its required minimum capital andminimum surplus and shall not pledge, hypothecate, or otherwise encumber thosereserve assets. The Commissioner, upon application made to the Commissioner,may issue a written order approving the pledging, hypothecation, or encumbranceof any of the assets of an insurer not otherwise prohibited upon a finding thatthe pledging, hypothecation, or encumbrance will not adversely affect theinsurer's solvency.

(b)        Every insurer shallfile, along with any statement filed under G.S. 58‑2‑165, a statementsworn to by the chief executive officer of the insurer that: (i) Title toassets in an amount equal to the policyholder‑related liabilities andminimum required capital and minimum required surplus of the insurer that arenot pledged, hypothecated, or otherwise encumbered is vested in the insurer;(ii) the only assets of the insurer that are pledged, hypothecated, orotherwise encumbered are as identified and reported in the sworn statement andno other assets of the insurer are pledged, hypothecated, or otherwiseencumbered; and (iii) the terms and provisions of the transaction of thepledge, hypothecation, or encumbrance are as reported in the sworn statement.

(c)        Any person thataccepts a pledge, hypothecation, or encumbrance of any asset of an insurer, assecurity for a debt or other obligation of the insurer, not in accordance withthis Article, is deemed to have accepted the asset subject to a superior,preferential, and automatically perfected lien in favor of claimants: Provided,that said lien does not apply to the assets of an insurer in a delinquencyproceeding under Article 30 of this Chapter if the Commissioner or the court,whichever is appropriate, approves the pledge, hypothecation, or encumbrance ofthe assets.

(d)        In the event of theliquidation of any insurer subject to this Article, claimants of the insurershall have a prior and preferential claim against all assets of the insurerexcept those that have been pledged, hypothecated, or encumbered in accordancewith this Article. Subject to Article 30 of this Chapter, all claimants haveequal status; and their prior and preferential claims are superior to any claimor cause of action against the insurer by any other person. (1985, c. 327, s. 1; 1989, c.452, s. 4; 1991, c. 681, s. 30.3; 1993, c. 504, s. 10; 2002‑187, s. 2.9.)

State Codes and Statutes

Statutes > North-carolina > Chapter_58 > GS_58-13-25

§ 58‑13‑25. Prohibition of hypothecation.

(a)        Every insurersubject to this Article shall at all times have and maintain free andunencumbered reserve assets equal to an amount that is the total of itspolicyholder‑related liabilities and its required minimum capital andminimum surplus and shall not pledge, hypothecate, or otherwise encumber thosereserve assets. The Commissioner, upon application made to the Commissioner,may issue a written order approving the pledging, hypothecation, or encumbranceof any of the assets of an insurer not otherwise prohibited upon a finding thatthe pledging, hypothecation, or encumbrance will not adversely affect theinsurer's solvency.

(b)        Every insurer shallfile, along with any statement filed under G.S. 58‑2‑165, a statementsworn to by the chief executive officer of the insurer that: (i) Title toassets in an amount equal to the policyholder‑related liabilities andminimum required capital and minimum required surplus of the insurer that arenot pledged, hypothecated, or otherwise encumbered is vested in the insurer;(ii) the only assets of the insurer that are pledged, hypothecated, orotherwise encumbered are as identified and reported in the sworn statement andno other assets of the insurer are pledged, hypothecated, or otherwiseencumbered; and (iii) the terms and provisions of the transaction of thepledge, hypothecation, or encumbrance are as reported in the sworn statement.

(c)        Any person thataccepts a pledge, hypothecation, or encumbrance of any asset of an insurer, assecurity for a debt or other obligation of the insurer, not in accordance withthis Article, is deemed to have accepted the asset subject to a superior,preferential, and automatically perfected lien in favor of claimants: Provided,that said lien does not apply to the assets of an insurer in a delinquencyproceeding under Article 30 of this Chapter if the Commissioner or the court,whichever is appropriate, approves the pledge, hypothecation, or encumbrance ofthe assets.

(d)        In the event of theliquidation of any insurer subject to this Article, claimants of the insurershall have a prior and preferential claim against all assets of the insurerexcept those that have been pledged, hypothecated, or encumbered in accordancewith this Article. Subject to Article 30 of this Chapter, all claimants haveequal status; and their prior and preferential claims are superior to any claimor cause of action against the insurer by any other person. (1985, c. 327, s. 1; 1989, c.452, s. 4; 1991, c. 681, s. 30.3; 1993, c. 504, s. 10; 2002‑187, s. 2.9.)


State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_58 > GS_58-13-25

§ 58‑13‑25. Prohibition of hypothecation.

(a)        Every insurersubject to this Article shall at all times have and maintain free andunencumbered reserve assets equal to an amount that is the total of itspolicyholder‑related liabilities and its required minimum capital andminimum surplus and shall not pledge, hypothecate, or otherwise encumber thosereserve assets. The Commissioner, upon application made to the Commissioner,may issue a written order approving the pledging, hypothecation, or encumbranceof any of the assets of an insurer not otherwise prohibited upon a finding thatthe pledging, hypothecation, or encumbrance will not adversely affect theinsurer's solvency.

(b)        Every insurer shallfile, along with any statement filed under G.S. 58‑2‑165, a statementsworn to by the chief executive officer of the insurer that: (i) Title toassets in an amount equal to the policyholder‑related liabilities andminimum required capital and minimum required surplus of the insurer that arenot pledged, hypothecated, or otherwise encumbered is vested in the insurer;(ii) the only assets of the insurer that are pledged, hypothecated, orotherwise encumbered are as identified and reported in the sworn statement andno other assets of the insurer are pledged, hypothecated, or otherwiseencumbered; and (iii) the terms and provisions of the transaction of thepledge, hypothecation, or encumbrance are as reported in the sworn statement.

(c)        Any person thataccepts a pledge, hypothecation, or encumbrance of any asset of an insurer, assecurity for a debt or other obligation of the insurer, not in accordance withthis Article, is deemed to have accepted the asset subject to a superior,preferential, and automatically perfected lien in favor of claimants: Provided,that said lien does not apply to the assets of an insurer in a delinquencyproceeding under Article 30 of this Chapter if the Commissioner or the court,whichever is appropriate, approves the pledge, hypothecation, or encumbrance ofthe assets.

(d)        In the event of theliquidation of any insurer subject to this Article, claimants of the insurershall have a prior and preferential claim against all assets of the insurerexcept those that have been pledged, hypothecated, or encumbered in accordancewith this Article. Subject to Article 30 of this Chapter, all claimants haveequal status; and their prior and preferential claims are superior to any claimor cause of action against the insurer by any other person. (1985, c. 327, s. 1; 1989, c.452, s. 4; 1991, c. 681, s. 30.3; 1993, c. 504, s. 10; 2002‑187, s. 2.9.)