CHAPTER 88 - INSURANCE DEPARTMENT - ADMINISTRATION OF DEPOSITS

AN ACT TO AMEND CHAPTER 20 OF TITLE SIX OF THE REVISED CODE OF THE STATE OF DELAWARE OF 1915, AS AMENDED, REVISED AND CONSOLIDATED BY CHAPTER 52 OF VOLUME 37 LAWS OF DELAWARE, BY ADDING THERETO A NEW ARTICLE TO BE KNOWN AS ARTICLE VIII, PROVIDING FOR THE ADMINISTRATION OF DEPOSITS MADE WITH THE INSURANCE COMMISSIONER IN. TRUST UPON A RECEIVER BEING APPOINTED FOR THE INSURANCE COMPANY OR SURETY COMPANY MAKING THE DEPOSITS BY HAVING THE RECEIVER SO APPOINTED SUBSTITUTED AS TRUSTEE AND HAVING THE INSURANCE COMMISSIONER TURN OVER SUCH DEPOSITS TO SUCH RECEIVER AND MAKING THE FUND SO TURNED OVER TO SUCH RECEIVER SUBJECT TO PAYMENT OF THE COSTS AND EXPENSES OF ADMINISTRATION OF THE FUND AND VESTING POWER IN THE CHANCELLOR OF THE STATE OF DELAWARE TO ENFORCE THE PROVISIONS OF THE ARTICLE.

Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:

Section 1. That Chapter 20, Title Six of the Revised Code of the State of Delaware of 1915, as amended, revised and consolidated by Chapter 52 of Volume 37 of the Laws of Delaware, be and the same is hereby amended by adding thereto a new Article to be known as Article VIII, providing for the administration of deposits made with the Insurance Commissioner in trust upon a Receiver being appointed for the Insurance Company or Surety Company making the deposits by having the Receiver so appointed substituted as Trustee and having the Insurance Commissioner turn over such deposits to such Receiver and making the Fund so turned over to such Receiver subject to payment of the costs and expenses of administration of the Fund and vesting power in the Chancellor of the State of Delaware to enforce the provisions of the Article, as follows:

ARTICLE VIII Administration of Deposits upon Receivership by Substitution of Receiver as Trustee

Section 1. Whenever the Insurance Commissioner of the State of Delaware holds any money, securities or other property deposited with and/or assigned unto him as trustee pursuant to or in attempted compliance with the provisions of Chapter 20 of Title Six of the Revised Code of the State of Delaware of 1915, or of any amendment, revision or consolidation thereof heretofore or hereafter made, or otherwise, and a receiver or receivers shall have been appointed by the Chancellor of the State of Delaware pursuant to the provisions of 574. Sec. 3, Art. I, Chapter 20 of Title Six; 1957. Sec. 43, Art. I, Chapter 65 of Title Nine; 3883. Sec. 40, Chapter 117 of Title Nineteen, or 3891. Sec. 48, Chapter 117 of Title Nineteen of the Revised Code of the State of Delaware of 1915, or any amendment or revision of any of said sections, for the insurance company or surety company which made such deposit and/or assignment, the Chancellor of the State of Delaware, upon application of any such receiver or receivers, the Insurance Commissioner, or of any other party interested in said property, upon determining that said receiver or receivers is or are duly qualified, shall enter an order in said receivership proceedings authorizing and empowering said receiver or receivers to accept any such money, securities or other property from the Insurance Commissioner and upon a certified copy of said order being tendered to the Insurance Commissioner, he shall transfer, assign and set over all of his right, title and interest in and to said money, securities and other property and shall deliver such money, securities and other property so deposited and/or assigned with or unto him unto such receiver or receivers.

Section 2. The Insurance Commissioner shall be relieved of any liability with respect to all money, securities, or other property, transferred, assigned, set over and delivered by him to any receiver or receivers pursuant to the provisions of this Article.

Section 3. The receiver or receivers of any insurance company or surety company, to whom money, securities, or other property shall have been transferred, assigned, set over and delivered in accordance with the provisions of this Article, shall receive and administer such money, securities, or other property, subject to any and all trusts, priorities, liens, claims and/or encumbrances which may have attached to such money, securities, or other property, by virtue of any deposit with the Insurance Commissioner or while the same were in the custody and possession of the Insurance Commissioner or which may attach to said money, securities, or other property after the same shall have been transferred and delivered to such receiver or receivers, and subject to all orders of the Chancellor of the State of Delaware.

Section 4. The Chancellor of the State of Delaware shall have full power and authority to make and enforce any order or orders, either preliminary or final, necessary to enforce the provisions of any Section of this Article.

Section 5. All money, securities, or other property, transferred, assigned, set over and delivered to any receiver or receivers pursuant to the provisions of this Article shall be subject to the payment of the costs and expenses of administration of said money, securities, or other property, including such compensation as the Chancellor of the State of Delaware shall allow to the receiver or receivers and for counsel for the receiver or receivers for such administration.

Section 6. The provisions of this Act shall apply to any proceeding or proceedings relating to any insurance company or surety company in receivership pending at the time of the passage and approval of this Act or which may be instituted hereafter.

Approved April 8, 1935.