§ 27-14.3-18 - Powers and duties of rehabilitator. - Rhode Island Statutes

SECTION 27-14.3-18

   § 27-14.3-18  Powers and duties ofrehabilitator. – (a) The commissioner as rehabilitator may appoint one or more special deputieswho shall have all of the powers and responsibilities of the rehabilitatorgranted under this section, and the commissioner may employ counsel, clerks andassistants as necessary. The compensation of the special deputy, counsel,clerks, and assistants and all of the expenses of taking possession of theinsurer and of conducting the proceedings shall be fixed by the commissioner,with the approval of the court, and shall be paid out of the funds or assets ofthe insurer. The persons appointed under this section shall serve at thepleasure of the commissioner. The commissioner, as rehabilitator, may, with theapproval of the court, appoint an advisory committee of policyholders,claimants, or other creditors including guaranty associations should anadvisory committee be deemed necessary; provided, that if a nonprofit hospitalservice corporation, nonprofit medical service corporation, or nonprofit dentalservice corporation is subject to an order of rehabilitation, the commissionershall appoint an advisory committee of creditors to include Rhode Islandnonprofit hospitals. The committee shall serve at the pleasure of thecommissioner and shall serve without compensation other than reimbursement forreasonable travel and per diem living expenses. No other committee of anynature shall be appointed by the commissioner or the court in rehabilitationproceedings conducted under this chapter.

   (b) In the event that the property of the insurer does notcontain sufficient cash or liquid assets to defray the costs incurred, thecommissioner may advance the incurred costs out of any appropriation for themaintenance of the division of insurance. Any advanced amounts for expenses ofadministration shall be repaid to the commissioner for the use of the insurancedepartment out of the first available money of the insurer.

   (c) The commissioner may reimburse the division of insuranceand its agents and consultants at its statutory examination rate and/orreasonable consultants' rate for reasonable costs incurred in the examinationand the investigation in anticipation of the rehabilitation of the insurer andin the rehabilitation of the insurer, from the funds or assets of the insurer,those fees to be class one expenses of administration pursuant to §27-14.3-46.

   (d) The rehabilitator may take any action that he or shedeems necessary or appropriate to reform and revitalize the insurer. He or sheshall have all of the powers of the directors, officers, and managers, whoseauthority shall be suspended, except as they are delegated by therehabilitator. He or she shall have full power to direct and manage, to hireand discharge employees subject to any contract rights they may have, and todeal with the property and business of the insurer.

   (e) If it appears to the rehabilitator that there has beencriminal or tortious conduct, or breach of any contractual or fiduciaryobligation detrimental to the insurer by any officer, manager, agent, insuranceproducer, broker, employee, or other person, he or she may pursue allappropriate legal remedies on behalf of the insurer.

   (f) If the rehabilitator determines that reorganization,consolidation, conversion, reinsurance, merger, or other transformation of theinsurer is appropriate, he or she shall prepare a plan to effect those changes.Upon application of the rehabilitator for approval of the plan, and after anynotice and hearings as the court may prescribe, the court may either approve ordisapprove the proposed plan, or may modify it and approve it as modified. Anyplan approved under this section shall be, in the judgment of the court, fairand equitable to all parties concerned. If the plan is approved, therehabilitator shall carry out the plan. In the case of a life insurer, theproposed plan may include the imposition of liens upon the policies of thecompany, if all of the rights of the shareholders are first relinquished. Aplan for a life insurer may also propose imposition of a moratorium upon loanand cash surrender rights under policies for a period and to an extent as maybe necessary.

   (g) The rehabilitator shall have the power under §§27-14.3-30 and 27-14.3-31 to avoid fraudulent transfers.