692C.402 - Sources from which receiver appointed under order for liquidation or rehabilitation of insurer is authorized to recover. - Nevada Statutes

692C.402  Sources from which receiver appointed under order for liquidation or rehabilitation of insurer is authorized to recover.

      1.  If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order may recover on behalf of the insurer:

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

      (b) Any payment in the form of a bonus, settlement on termination, or extraordinary adjustment of salary in a lump sum made by the insurer or a subsidiary to a director, officer or employee,

Ê if the distribution or payment is made at any time during the year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsection 2 and of NRS 692C.404.

      2.  Such a distribution is not recoverable if the parent or affiliate 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 its ability to fulfill its contractual obligations.

      (Added to NRS by 1995, 1774)