LD 933
pg. 36
Page 35 of 38 PUBLIC Law Chapter 346 Page 37 of 38
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LR 2060
Item 1

 
A. Prior to the termination of any liquidation,
rehabilitation or conservation proceeding, the court may
take into consideration the contributions of the respective
parties, including the association, the shareholders and
policy owners of the impaired or insolvent insurer and any
other party with a bona fide interest, in making an
equitable distribution of the ownership rights of the
impaired or insolvent insurer. In such a determination,
consideration shall must be given to the welfare of the
policyholders policy owners of the continuing or successor
insurer.

 
B. No distribution to stockholders, if any, of an impaired
or insolvent insurer shall may be made until and unless the
total amount of assessments levied by the association with
respect to the insurer have been fully recovered by the
association.

 
5. Unfair trade practice. It shall be a prohibited unfair
trade practice for any person to make use in any manner of the
protection afforded by this chapter in the sale of insurance.

 
6. Recovery procedure; provisions. The recovery procedure
shall must provide that:

 
A. If an order for liquidation or rehabilitation of an
insurer domiciled in this State has been entered, the
receiver appointed under that order shall have has a right
to recover on behalf of the insurer, from any affiliate that
controlled it, the amount of distributions, other than stock
dividends paid by the insurer on its capital stock, made at
any time during the 5 years preceding the petition for
liquidation or rehabilitation subject to the limitations of
paragraphs B to D;

 
B. No such dividends shall distribution may be recoverable
if the insurer shows that when paid the distribution was
lawful and reasonable and that the insurer did not know and
could not reasonably have known that the distribution might
adversely affect the ability of the insurer to fulfill its
contractual obligations;

 
C. Any person who was an affiliate that controlled the insurer
at the time the distributions were paid shall be is liable up to
the amount of distributions he the person received. Any person
who was an affiliate that controlled the insurer at the time the
distributions were declared shall be is liable up to the amount
of distributions he the person would have received if they had
been paid immediately. If 2 or more persons are liable with
respect to


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